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ELEMENTS OF SOCIALISM 



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THE MACMILLAN COMPANY 

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MACMILLAN & CO., Limited 

LONDON • BOMBAY • CALCUTTA 
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TORONTO 



Elements of Socialism 



A TEXT-BOOK 



BY 

JOHN SPARGO 



SOCIALISM, A 
SUMMARY AND INTERPRETATION OF SOCIALIST 
PRINCIPLES/' ETC., ETC. 
AND 

GEORGE LOUIS ARNER, Ph.D. 

LATE INSTRUCTOR IN ECONOMICS IN DARTMOUTH COLLEGE 



j&eto gork 

THE MACMILLAN COMPANY 
1912 






+*^ 






Copyright, 19 12 
By THE MACMILLAN COMPANY 



Set up and electrotyped. Published February, 191 2 



li 

SO.A309 I 
Nr 



CONTENTS 



PART I 

SOCIALISM AS A CRITICISM 

CHAPTER PAGE 

I. Introduction 3 

II. Capitalist Society 7 

III. Planless Production 19 

IV. Poverty . 30 

V. Leisure and Luxury 44 

VI. Individual and Social Responsibility . . .53 



PART II 
SOCIALIST THEORY 



VII. 


Introductory 


. 61 


VIII. 


Social Evolution .... 


. 65 


IX. 


The Economic Interpretation of History . . 76 


X. 


Industrial Evolution 


. 91 


XL 


The Class Struggle Theory 


. 100 


XII. 


Value and Price 


. 116 


XIII. 


Surplus- Value 


. 141 


XIV. 


The Law of Concentration 


. 157 


XV. 


Monopolies and Trusts 

PART III 
THE SOCIALIST IDEAL 


• 168 


XVI. 


The Utopian Socialist Ideal 


. 187 


XVII. 


The Ideals of Modern Socialism . , 


. 201 


XVIII. 


The Socialist State — Political . , 


. 212 


XIX. 


The Socialist State — Economic . , 


. 224 


XX. 


Socialism and the Family 


. 240 



111 



IV 



CONTENTS 



PART IV 



CHAPTER 

XXI. The 
XXII. The 

(1 

(2 

(3 

(4 

(5 

(6 

(7 

(8 

(9 

(10 

(11 

(12 

(13 

(14 
(15 
(16 



THE SOCIALIST MOVEMENT 

PAGE 

Rise and Growth of Modern Socialism . . 255 
National Socialist Movements . . . 266 

Germany 266 

France . . . , 275 

Austria 279 

Belgium 281 

Italy 283 

Great Britain 285 

The United States 292 

Russia 301 

Finland 305 

The Scandinavian Countries .... 306 

Holland 308 

Switzerland 309 

Spain 310 

Poland 310 

Hungary 311 

Other Countries 312 



PART V 

POLICY AND PROGRAM 

Will. Socialism and Social Reform . 
XXIV. Tun Reform Program of Socialism . 
XXV. Some Objections to Socialism . 



317 
337 
354, 



PART I 

SOCIALISM AS CRITICISM 



CHAPTER I 

INTRODUCTION 

Beginning of the Socialist movement: In the early part 
of the nineteenth century, that splendid century of progress 
in science and invention, of capitalistic expansion, philo- 
sophic individualism, and economic laissez jaire, arose the 
deep-seated and far-reaching popular movement which we 
call Socialism. Like every other great movement in history, 
it was at first weak and insignificant. It consisted of little 
more than a vague groping for a way of escape from the evils 
of the time. Its adherents were for the most part poor men 
without influence, victims of poverty and oppression, led 
by a few idealists. Thus, it was not essentially different 
from the movements of protest which in all ages have chal- 
lenged and assailed recognized injustice. 

But the new movement soon passed out of this stage of 
its development, and became a conscious, disciplined force 
with its positive and negative sides well defined. The rapidly 
growing industrial system gave a great impetus to science. 
The principle of universal evolution and the methods of 
science profoundly influenced every department of human 
thought and activity in the leading countries of the world. 
Under that influence Socialism took shape as a powerful 
force aiming at the destruction of an economic system in 
which a few are enabled to appropriate most of the advan- 
tages of industrial effort and progress, and at the develop- 
ment of a new economic system based upon cooperation, 
democracy and justice, and insuring equality of opportunity 
to all. 

Importance of the movement: In spite of ridicule, ostra- 
cism and bitter persecution the Socialist movement has made 
phenomenal progress. Its representatives are to be found 
in the parliaments of all the leading nations. The political 
strength of the movement is indicated by the fact that nearly 

3 



4 ELEMENTS OF SOCIALISM 

ten million votes are cast for its parliamentary representa- 
tives throughout the world. Of course, the movement is 
much Btronger numerically than even these figures indicate. 
Making due allowance for the fact that in most countries 
women do not enjoy the parliamentary franchise, and the 
further fact that in many countries a large part of the adult 
male population is also excluded from the right of the franchise 
by property and other restrictive qualifications, it is probably 
a conservative estimate that forty million adults are Social- 
ists and would vote for Socialist representatives if they could. 

Obviously, such a movement demands and deserves 
serious and candid investigation and study. To be effec- 
tively and efficiently supported if good and wise it must be 
understood. To be effectively and efficiently opposed if evil 
and unwise it must likewise be understood. An understand- 
ing of the principles of Socialism, of the aims and methods 
of the movement, has become an essential condition of 
intelligent citizenship. The wilful and ignorant misrepre- 
sentation of Socialism in which many of its opponents have 
indulged is not only powerless to check the progress of the 
movement, but extremely dangerous. Nothing is more 
dangerous in a democracy than appealing to prejudice in 
the discussion of matters of this kind. 

Difficulties of definition: It is not an easy matter to 
formulate a satisfactory definition of Socialism. The task 
has been attempted by numerous writers, friendly and other- 
wise. That the definitions of Socialism by its advocates 
differ considerably from each other has been made the basis 
of much rather unreasonable criticism. A definition is 
simply a brief explanation of the thing defined. When the 
thing to be defined is at once a comprehensive criticism 
ociety, a philosophy interpreting the social conditions 
and institutions criticised, a forecast of the future de- 
velopment of society, and a movement with a program 
based upon these and intended to remove the evils com- 
plained of and to bring about the social ideal forecasted, 

definition is necessarily very difficult and hazardous. 

Thai the definition of one man should over-emphasize 

the critical aspeci of Socialism, that of another its philosophi- 

basis, thai Of B third its forecast and that of vet another 

Itfl program is inevitable. The cheap sneer that there are 



INTRODUCTION 5 

" fifty-seven varieties of Socialism" is an exceedingly petty 
criticism. We must bear in mind that difference in defini- 
tions is by no means the same thing as contradiction. It 
is safe to say that the recognized leaders of Socialist thought 
have defined Socialism with quite as large a degree of unan- 
imity and as small a degree of antagonism as have been shown 
by the recognized leaders of any department of thought, 
if we omit those relating to and conditioned by the exact 
sciences. 

Provisional definition: As we have already intimated, 
Socialism may be conveniently divided into four parts. 
No study of Socialism can be satisfactory, no definition of 
it can be complete, which does not consider it as (1) a criti- 
cism of existing society; (2) a philosophy of social evolution; 
(3) a social forecast or ideal; (4) a movement for the attain- 
ment of the ideal. 

As a provisional definition, then, we may accept the 
following: Socialism is a criticism of existing society which 
attributes most of the poverty, vice, crime and other social 
evils of today to the fact that, through the private or class 
ownership of the social forces of production and exchange, 
the actual producers of wealth are exploited by a class of 
non-producers; a theory of social evolution according to 
which the rate and direction of social evolution are mainly 
determined by the development of the economic factors of 
production, distribution and exchange; a social forecast 
that the next epoch in the evolution of society will be dis- 
tinguished by the social ownership and control of the prin- 
cipal agencies of production and exchange, and by an 
equalization of opportunity as a result of this socialization; 
a movement, primarily consisting of members of the wealth- 
producing class, which seeks to control all the powers of the 
State and to bring about the collective ownership and con- 
trol of the principal means of production and exchange, 
in order that poverty, class antagonisms, vice and other ill 
results of the existing social system may be abolished, and 
that a new and better social system may be attained. 



ELEMENTS OF SOCIALISM 



SUMMARY 

1. Socialism arose as a movement of protest, and through the accept- 
ance of the principle of evolution became a conscious, disciplined force 
with a definite aim. 

2. Politically, Socialism is represented by a great international party 
with nearly 10,000,000 voters and 40,000,000 adult sympathizers. 

3. Socialism must be considered as a criticism of existing society, 
as a philosophy of social evolution, as a social forecast or ideal, and as 
a movement for the attainment of the ideal. 



QUESTIONS 

1. In what way has science influenced the character of Socialism? 

2. What is the chief aim of the Socialist movement? 

3. Give a provisional definition of Socialism. 



CHAPTER II 

CAPITALIST SOCIETY 
I 

Point of view in Socialist criticism: The Socialist criti- 
cism of society is essentially constructive and impersonal. 
This is not always apparent to the casual reader of, or 
listener to a popular presentation of Socialism, but if the 
speaker or writer is really representative of Socialism at its 
best his criticisms of institutions are directed toward the 
determining economic conditions and their consequences, 
and his criticism of men has for its purpose the desire to 
give concrete examples of types and classes as they are 
affected by economic conditions. Karl Marx makes this 
perfectly clear in the preface to the first volume of Capital. 1 

This criticism, moreover, has always the transformation of 
society through changes in the basic economic conditions 
as its motive. This assumption of the fundamental economic 
basis of society and social institutions is essential to Social- 
ism. As we shall see later in our study, psychological and 
other factors in social evolution are not excluded. They 
are simply regarded as subordinate to the economic factors. 

Socialism and decadent institutions: Socialists do not 
devote much attention to the criticism of unimportant or 
decadent institutions. Attempts to direct Socialist attacks 
to the surviving remnants of feudal society have largely 

"I paint the capitalist and landlord in no sense couleur de rose. 
But here individuals are dealt with only in so far as they are the person- 
ifications of economic categories, embodiments of particular class- 
relations and class-interests. My standpoint, from which the evolu- 
tion of the economic formation of society is viewed as a process of 
natural history, can less than any other make the individual responsible 
for relations whose creature he socially remains, however much he may 
subjectively raise himself above them." — Karl Marx, Capital, vol. I, 
p. 15, American edition. 

7 



8 ELEMENTS OF SOCIALISM 

failed for the reason that the Socialists are interested in 
and mainly concerned with the vital power of Capitalism. 
Both in Germany and England, for example, all efforts to 
induce the Socialists to direct special attacks against the 
institution of monarchy have failed. At the International 
Socialist Congress at Amsterdam, in 1904, M. Jean Jaures, 
the French Socialist leader, boasted of the fact that France 
had long been a republic and rebuked the German Social 
Democrats for acquiescing in the continuance of the mon- 
archy. He was replied to by Herr Bebel to the effect that, 
while the German Social Democrats desired a republic they 
would not make it a special issue, because it was not worth 
while. So long as the capitalist state exists, whether its form 
be monarchical or republican, its power will be used to 
defend the privileges and powers of the capitalist class. 
Therefore, the abolition of the capitalist system itself is the 
really important goal. 

The capitalist class: With the final overthrow of feudal- 
ism and the aristocracy of birth by the victorious middle 
class at the time of the French Revolution the foundation 
was already laid for a new aristocracy of wealth. The inven- 
tion of power machinery and the consequent concentration 
of industry in factories, made individual ownership of the 
instruments of production by the workers themselves an 
impossibility. Those producers who were first to take 
advantage of the new methods, or who had the greatest 
advantages in such important matters as power, markets, 
labor supply or raw materials, soon became the sole owners 
of industry. Thus was established a new class whose mem- 
bers, like the great land-owners, have been able to draw a 
perpetual income from industry, even when performing no 
directive labor. 

It is true that many members of this class perform a 
high grade of labor, as managers, for which they are liberally 
paid, but the greater part of their income is the direct or 
indirect result of ownership of the means of production and 
is not in any sense in proportion either to need or to ability. 
Those persons, then, whose income is wholly or principally 
derived from the labor of others as a result of their ownership 
of the means of production constitute what the Socialist 
knows as the Capitalist Class. 



CAPITALIST SOCIETY 9 

The proletariat: The concentration of the ownership of 
the means of production, and the growth of cities and factory 
towns, transformed the journeyman of handicraft industry 
and the peasant of feudalism into the propertyless wage- 
worker of modern industry. With no control over his means 
of livelihood, he is obliged to accept the current rate of 
wages for the kind of labor he performs, pay for the goods 
he consumes a price which is set by conditions over which 
he has no control, and live wherever the capitalist entre- 
preneur may locate his factory. 

In the early days of the capitalist system, class lines 
were loosely drawn and it was possible for a man of ability 
to rise from the working class to the capitalist class. But 
as the system becomes more rigid and more complex the 
passing of a proletarian into the capitalist class becomes all 
but impossible. He may leave his class in spirit and become 
a retainer of the capitalist class, but generally, and unless 
specially favored, he remains in fact a proletarian. 

Who constitute the proletariat? The proletariat properly 
includes not only factory workers and day laborers, but clerks 
in business houses and salesmen in mercantile establish- 
ments. The farm laborer in Europe is still a feudal peasant 
to a very large extent, but in America, so far as he is not the 
son or heir of a middle-class farmer, the farm laborer is 
essentially a proletarian. The word "proletariat" is of Ro- 
man origin. In ancient Rome it was applied to a large class 
of free citizens without property or certain means of exis- 
tence. The modern technical meaning of the word connotes 
the class of workers who do not own the tools and imple- 
ments of their calling, the wage-working class in general. 
In common usage, however, the word is used to describe 
the entire class of workers who own no property. 
m Wage slavery: Socialists frequently speak of the condi- 
tion of the proletariat under Capitalism as "Wage Slavery." 
This term is sometimes objected to on the ground that the 
worker is free to give up his job and move from place to 
place at will. He is thus in a very different position from 
that of the chattel slave of antiquity, or even that of the 
feudal serf. 

The Socialist replies that while the worker is theoretically 
free he is in fact enslaved; that while the law does not 



10 ELEMENTS OF SOCIALISM 

enforce wage slavery, it is enforced by conditions more 
effectually coercive than statutes could be. There is always 
an army of unemployed ready to take the jobs that the 
discontented may vacate, and the choice that confronts the 
worker is usually a choice between holding his job or falling 
to poverty or even pauperism. If he moves from one factory 
to another, he only changes masters, still working under the 
same general conditions. The average worker cannot hope 
to find relief in private business enterprises. The risk is too 
precarious, for the majority of small business enterprises 
fail. 

Except in rare cases, agricultural employment offers no 
way of escape to the factory worker. The wages of farm 
laborers are generally far lower than those of industrial 
laborers and for one accustomed to city life the loneliness 
of the country is often intolerable. The farmer who prospers 
must combine a high degree of specialized technical skill 
with good business ability, and these things the factory- 
trained worker lacks and cannot easily learn. The farm offers 
no solution. The term "wage slavery' ' is therefore hardly 
an exaggeration. 

Herbert Spencer on wage slavery: That the system of 
wage-labor is a form of slavery is sometimes contended by 
opponents of Socialism as stoutly as by the Socialists them- 
selves. Herbert Spencer, for example, argues this with 
as much earnestness and force as any Socialist writer. He 
says: "The wage-earning factory-hand does, indeed, exem- 
plify entirely free labor, in so far that, making contracts at 
will and able to break them after short notice, he is free to 
engage with whomsoever he pleases and where he pleases. 
But this liberty amounts in practice to little more than the 
ability to exchange one slavery for another; since, fit only 
for his particular occupation, he has rarely an opportunity 
of doing anything more than decide in what mill he will pass 
the greater part of his dreary days. The coercion of circum- 
stances often bears more hardly on him than the coercion 
of the master does on one in bondage. " ' 

The middle class: Between the true capitalist class and 
the true proletariat stands a somewhat indefinite middle 
class, composed of small capitalists, professional men, salaried 
1 Herbert Spencer, The Principles of Sociology, vol. Ill, p. 525. 



CAPITALIST SOCIETY 



11 



or semi-independent business men and land-owning farmers. 
The lines of demarkation between the middle class and the 
classes on either side of it are not always clearly distinguish- 
able, but the types of the three classes can be distinguished. 
The middle class has not the fixed characteristics of the other 
two. Its members are usually either striving to reach the 
capitalist class or struggling desperately to avoid sinking 
into the proletarian class. The small business man sees 
his business absorbed into a combination and becomes 
himself either a salaried employee or a wage-worker. The 
small capitalists seem to be increasing in number, but their 
influence in the management of industry is diminishing. 

Pride of property usually makes the small business man 
an ally of the true capitalist class, although there are many 
examples of adherence to the cause of the proletariat by 
members of that group. The professional man is becoming 
increasingly dependent upon the capitalist class for support 
and is usually conservative, although large numbers of 
professional men and women sympathize with the pro- 
letariat and many become active leaders in proletarian 
movements. The proportion of farmers owning their land 
is steadily diminishing 1 and the farmer is becoming more 
and more dependent upon capitalist agencies for the market- 
ing of his product. These facts are forcing large numbers 
of farmers into sympathetic relations with the proletariat. 



TABLE I 
Changes in Farm Tenure in the United States 8 



Year. 


Total 

Number of 

Farms. 


Number of Farms Operated by- 


Per Cent, of 

Farms Operated 

by 




Owners. 


Cash 
Tenants. 


Share 
Tenants. 


Owners. 


Cash 
Ten- 
ants. 


Share 
Ten- 
ants. 


1900... 

1890... 
1880... 


5,739,657 
4,564,641 
4,008,907 


3,713,371 
3,269,728 
2,984,306 


752,920 
454,659 
322,357 


1,273,366 
840,254 
702,244 


64.7 
71.6 
74.5 


13.1 

10.0 

8.0 


22.2 
18.4 
17.5 



1 See Table, Changes in Farm Tenure in the United States. 

8 U. S. Census Reports, 1900, Vol. V, p. lxxvii. 



12 ELEMENTS OF SOCIALISM 

When Marx predicted the more or less rapid extinction of 
the middle class he referred primarily to the class of petty 
manufacturers and merchants. It is evident that, so far 
from becoming extinct, this class has numerically increased. 
This increase is probably accounted for in part by the fact 
that economic pressure forces large numbers of wage-workers 
into the lower ranks of the middle class, most of whom fail 
and fall back into the proletariat after a brief struggle. 
This movement is always going on. Wage-workers who find 
it impossible to secure employment take their small savings 
and attempt to make a living in the petty retail trades, 
most of them failing and sinking into a worse condition 
than that from which they hoped to escape. The same may 
be said of thousands of wage-earners too old for work, or 
incapacitated by disease or accident. Those who do not 
utterly fail may be roughly divided into three groups: 
(1) those who eke out a scanty living rarely or never superior 
to that of the wage-earning proletariat; (2) those who cease 
to do business on their own account and become salaried 
employees, as agents and managers for large corporations; 
(3) those whose business establishments are absorbed by 
large concerns and who become small stockholders. 

Industrial organization: The magnitude of modern indus- 
trial enterprises, and the great amounts of capital necessary 
for their establishment and operation, make individual owner- 
ship impossible as a general rule. Individual capitals must 
be combined. The simplest form of combination in owner- 
ship is the partnership in which two or more capitalists 
agree to engage in an enterprise together and share in the 
profits in proportion to the capital which each has contrib- 
uted. If, however, these capitalists apply to the State and 
receive a charter entitling them to act as a business unit 
they acquire, as a corporation, a new status. They not only 
have all the advantages of combined capital, but the addi- 
tional advantages of perpetual life, limited liability, flex- 
ibility of organization and concentration of power. Mem- 
bership in the corporation consists simply in the ownership 
of stock, which can be freely bought and sold. 

These advantages have made the corporation the charac- 
teristic form of industrial organization under capitalism, 
and the result has been the development of a distinct indus- 



CAPITALIST SOCIETY 13 

trial State within the political State. And by virtue of its 
control of the means of livelihood the industrial State is the 
more powerful and largely controls the political organization 
of society. And, while since the eighteenth century the forms 
of the political State have become more democratic, the 
industrial State remains in the hands of the few. It is not 
even an aristocracy, the rule of the best, but a plutocracy, 
the rule of the richest. 

Gains under capitalism: While capitalism has brought 
with it many evils which were relatively unknown in the 
earlier stages of industrial evolution, it is at the same time 
a distinct forward step. Contrary to a very common im- 
pression, recognition of this fact is inherent in the philos- 
ophy of Socialism. Few apologists of capitalism have more 
clearly perceived, or more eloquently described the immense 
benefits, both material and spiritual, of the capitalist era 
than Karl Marx himself. 1 

Machinery has increased the productivity of labor many 
fold. While the most apparent benefits of this gain have gone 
to the capitalists, still the workers have made real and sub- 
stantial progress. The proletarian is still propertyless, but 
he consumes more goods, of greater variety and better qual- 
ity, than did his ancestors of the journeyman and peasant 
classes. The proletarian in Western Europe and America 
is better educated than the feudal gentleman. He is rapidly 
becoming emancipated from superstition and freed from 
intellectual and spiritual bondage. Travel has been cheap- 
ened beyond all dreams of a century ago. Famine and 
pestilence are almost unknown. Disease has been so checked 
that the average length of life is greater by fifteen years 
than before the industrial revolution. Wars have become 
less frequent and the nations of the world are closer together 
than ever before. 

II 

Relative vs. absolute well-being: While it is true that 
in an absolute sense the working classes are better off, there 
has been a relative loss. A far larger share of the total 
product of industry is now taken in the form of rent, interest 

1 See, e. g., The Communist Manifesto , Part I. 



14 ELEMENTS OF SOCIALISM 

and profits than ever before, and the classes in society who 
gain their income from such sources are growing in wealth 
and power more rapidly than are the working classes. The 
essential thing is not income but property. Vested interests, 
property rights, special privileges, rule the world and make 
democracy impossible. To be a well-fed slave is not a high 
ambition, and unless the workingman can gain in independ- 
ence, self-respect and a sense of responsibility no superficial 
reform will carry with it much enduring satisfaction, no 
government and no social order can be stable. But even 
so far as these superficial things go, capitalistic society does 
not give to the proletariat its share of the benefits of progress. 

Wages: The compensation of the producer under capital- 
ism is determined neither by his needs, nor by the value 
of the product that he gives to society. Laboring power is 
a commodity that is bought and sold on the market, and 
the price of which at any given time is determined by the 
laws of supply and demand. In the long run, the wages of 
any given class of labor equals its cost of production. Thus 
labor becomes as impersonal as so much steam or water 
power, and is placed on the same level with capital and land 
as one of the three factors in production in the currently 
accepted economic theory. 

The "iron law of wages": The statement of the law of 
wages by some Socialists in Lassalle's phrase, "the iron law 
of wages/ ' needs some qualification. According to this 
theory, wages can never permanently rise above the require- 
ments of a bare subsistence, for if they should so rise the 
number of children would increase, thus increasing the 
supply of labor and drawing the wage back to the bare 
subsistence level. This theory has been disproved by ex- 
perience, for as a matter of fact wages have permanently 
risen. Both nominal wages, or wages expressed in money, 
and real wages, or the sum of satisfaction that the laborer 
is able to enjoy as the result of his labor, have materially 
increased within fifty years and increased even more in the 
preceding fifty years. 

It frequently happens that the workers in one town 
receive higher wages and enjoy a higher standard of living 
than workers in another town who do exactly the same kind 
of work. The peculiar circumstances attending the indus- 



CAPITALIST SOCIETY 15 

trial development in various localities exert a greater influ- 
ence upon the standards of living than is commonly recog- 
nized. As an illustration: In one town the woolen industry 
was first established by English workers accustomed to a 
relatively high standard of living, and in another town by 
Belgians accustomed to a relatively low standard of living. 
In course of time, through the migration of workers and other 
causes, these characteristics disappear and in both towns the 
industry is carried on by a cosmopolitan industrial popula- 
tion. But the standards of living are not equalized. Wages, 
both nominal and real wages, continue to be higher in the 
former town than in the latter. In other words, there are 
local standards of living established by local usage and 
tradition. 

The standard of life: The principal fallacy in the "iron 
law of wages" in its extreme form is that the changing 
standard of life is not taken into account. The gains in 
the wage scale which are attained from time to time are 
not all absorbed in larger families, but a large part, and often 
the whole, of the gains go toward a greater abundance of 
material goods, education and recreation. As a matter of 
fact, the theory that any substantial increase of wages will 
lead to an increase in the size of families is absolutely unten- 
able. From the time of Adam Smith it has been recognized 
that low wages, extreme poverty and large families go 
together. 1 No single fact concerning population is better 
established than that the fecundity of the poorer classes is 
always greater than that of the well-to-do classes. In all 
countries the wealthiest classes are most infertile. 2 

The number and character of the wants, the satisfaction 
of which appear to a man as necessary, constitute his stand- 
ard of life. The typical wage will, in the long run, be just 
sufficient to maintain this standard and provide for the 
reproduction of labor. At any given time and place the wage 
may be higher or lower than the type. In the first case there 
will be expenditures for luxuries and a tendency toward a 
higher standard of life; in the second there will be poverty 
with occasional or chronic pauperism, and a tendency 

1 Cf., The Wealth of Nations, vol. I, ch. viii. 

2 This subject is discussed at length in The Common Sense of the Milk 
Question, by John Spargo. 



16 ELEMENTS OF SOCIALISM 

toward a lower standard of life. Taking the Western world 
as a whole the standard of life of the proletariat has steadily- 
risen. This is not usually apparent from year to year, but 
from generation to generation the gain is clearly marked. 
It is particularly obvious as between the first and second 
generations of European immigrants in the United States. 

This fact of the rising standard of living, far from being 
an argument for a continuance of the present system, is the 
one thing that makes industrial democracy possible, necessary 
and inevitable. It is a demonstrable fact that the higher the 
standard of life the greater will be the resistance offered to 
any lowering of that standard. A people with a low standard 
of living can be exploited, robbed, bullied, and even mur- 
dered in cold blood, without offering effective resistance. The 
Russian moujiks splendidly illustrate this fact. A people 
with a high standard of living, on the other hand, are jealous 
of their rights and quick to see and resent any infringement 
of them. 

The standard of life everywhere tends to rise. There are 
always unsatisfied wants just beyond the necessities of life 
which will be satisfied at every opportunity. As soon as 
the satisfaction of a want becomes habitual it becomes a 
part of the standard of life. Imitation has a great deal to 
do with this tendency to raise the standard of living. Where 
approximate equality in wealth prevails and men rarely 
come into direct contact with those whose standard of life 
is higher than theirs, the advance is slight and simply follows 
the increase of income. But where differences in wealth are 
great, the highest standard becomes the model which all 
strive to copy. Rich women set fashions which factory girls 
feel they must follow. Expecially is this true where a 
democratic philosophy has been preached, and where there 
is a tradition of those who have successfully crossed class 
barriers. In such a community there will be vigorous resist- 
ance, not only to a lowering of the standard of life, but to 
any interference with the rising of the standard, either by 
law or by economic exploitation. 

Economic pressure and resistance: In the earlier stages 
of social evolution it was the limitations of the physical 
environment which pressed upon the individual and pre- 
vented the full satisfaction of his wants. War, slavery, 



CAPITALIST SOCIETY 17 

feudal landlord, monarch and crystallized religious forms 
have successively and together suppressed the natural prog- 
ress of mankind. All these forms of social pressure were 
largely economic in their origin, but the most prevalent 
form of social pressure under capitalism is more purely 
economic than any earlier form. 

The older checks on progress have lost much of their force. 
Invention and discovery have pushed back the physical 
limitations, wars are less frequent, chattel slavery is abol- 
ished, the feudal landlord and the monarch are anachronisms, 
and religious terrorism has lost much of its force. The great 
repressive force now is the capitalistic domination of indus- 
try, the wage system by which labor is deprived of a large 
part of its product, and the limitation of industrial produc- 
tion for the sake of greater profits and a higher standard 
of life for the few at the expense of the many. Organized 
capitalism stands like a rock against any relative gain on 
the part of labor. It imports laborers with a lower standard 
of life to lower the standard at home. Less personal and 
more active than any of the older forms of pressure, except 
the physical limitations themselves, capitalism not only 
endeavors to prevent the standard of life from rising but 
attempts directly to lower it. 

To this pressure the proletariat offers a resistance pro- 
portionate to the gains already made. This resistance is 
not always conscious, and is not usually consciously directed 
against the real source of the pressure, but wherever there 
is a protest meeting, a labor union, a strike, a proletarian 
political party or a social revolution, this resistance is mani- 
festing itself. When this resistance is consciously directed 
against capitalism and towards industrial democracy and 
social freedom, all the essentials of a Socialist movement 
may be said to exist. 



18 ELEMENTS OF SOCIALISM 

SUMMARY 



1. Socialist criticism is essentially constructive and impersonal. 

2. The invention of machinery and the rise of factories brought 
about the reconstruction of social classes, the capitalist owners of the 
means of production becoming the dominant class and the proletariat, 
composed of propertyless wage-workers, the subject class. 

3. Between the capitalist class and the proletariat is a middle class, 
less definitely constituted than either, and with the interests and 
sympathies of its members divided. 

4. The capitalist age has been one of great material progress, with 
a distinct gain in the absolute well-being of the majority. 

II 

5. The compensation of labor under capitalism takes the form of 
a competitive wage, and the typical wage is just sufficient to maintain 
the current standard of life of the laborer and his family. 

6. The standard of life tends to rise from generation to generation, 
creating a continually strengthening demand for higher wages. 

7. The capitalist domination of industry acts as a great repressive 
force tending to lower the standard of fife of the proletariat. 

QUESTIONS 

1. Why do Socialists refuse to direct special attacks against the 
institutions of monarchy? 

2. What are the dominant characteristics of the capitalist class? 
Of the proletariat? 

3. What reasons are there for considering the position of the pro- 
letariat one of wage-slavery? 

4. What are the advantages of the corporation as a form of business 
organization? 

5. In what respects has the working class gained through capitalism? 

6. Distinguish between absolute and relative well-being. 

7. Criticise the "Iron Law of Wages." 

8. What is meant by the "Standard of Life"? 

9. How is the standard of life related to the wage system? 

Literature 
Ely, R. T., and Wicker, G. R., Elementary Principles of Economics. 
Part IV, Chap. III. 

Marx, Karl, Capital, Vol. I, Parts II and VI. 

Spargo, John, The Common Sense of the Milk Question, Chap. I; 
The Substance of Socialism, Part III. 



CHAPTER III 

PLANLESS PRODUCTION 

The competitive system: America has grown up in the 
spirit of the laissez faire philosophy: we have been taught 
to believe that if the government and the monopolists 
would not interfere, individual self interest working in the 
spheres of production and exchange would bring about the 
highest possible social efficiency. America has been the 
paradise of this laissez faire individualism. With mil- 
lions of acres of free land to which the dissatisfied could 
go, and a continent to develop; with the absence of tradi- 
tional authority and the presence of the most adventurous 
spirits of all countries, it is no wonder that individualism 
and competition appeal to the typical American. Then, 
too, the idea of the "Survival of the Fittest" introduced by 
Darwin, gave to competition a new scientific basis, so that 
even in these days of huge combinations, when Judge Gary 
of the United States Steel Corporation testifies before a 
Committee of the House of Representatives that competition 
in the steel industry is dead, 1 a large element in the American 
population still wishes to destroy the "Trust" and rely upon 
competition to bring about substantial social justice. 

This idea of the effectiveness of competition was illus- 
trated by an economist of a past generation by a description 
of the provisioning of London, holding it to be self-evident 
that no public or monopolistic agency could meet the com- 
plex and multiform needs so well as they were met by the 
blind working of competition. But the people of London 
were not all fed. Perhaps as many as thirty per cent had 
to go hungry part of the time, then as now. Competition 
falls far short of efficiency. 

Lack of coordination: In the laissez faire philosophy 
it was forgotten that individual liberty must be limited 

1 Vide reports in the daily press, July, 1911. 

19 



20 ELEMENTS OF SOCIALISM 

in order to bring about the maximum of social liberty. 
Darwin and his immediate followers failed to emphasize 
as Kropotkin has done the importance of cooperation as 
a factor in evolution. Competition is chaotic, it has no 
organization. It is simply the outgrowth of the ages before 
modern science was born. A scientific age demands scien- 
tific methods, and competition in industry is the reverse of 
scientific 

Under competition there is no way of estimating the 
demand. Producers work blindly and hope to be able to 
dispose of their products at a profit. There is no apportion- 
ment of the work among the various producers, so that no 
producer knows how much of the supply it will pay him to 
produce. This is especially evident in agriculture within a 
limited market. If the price of potatoes has been high each 
farmer will plant a large acreage of potatoes, with the result 
that in the next season there will be an over-supply of a 
bulky and perishable product which cannot be profitably 
disposed of. Competition, therefore, results in great fluc- 
tuations in price, gambling in the necessities of life, numerous 
business failures, irregular production and consequent injury 
to the working class. 

Unnecessary duplication: Anyone who has lived in a city 
which rejoiced in two or three different telephone systems 
can appreciate the disadvantages of competition. Every 
business man must have "both 'phones," and whenever 
one wishes to call a friend on his "Independent" telephone 
he discovers to his sorrow that the friend has a "Bell." 
Nothing is gained by this expensive duplication and incon- 
venience, for either extreme or "cut-throat" competition 
must go on until one company is financially ruined, or the 
companies must agree on a rate, thus giving no advantage 
over monopoly. Much money has been wasted in paralleling 
railroads. Capital diverted from industry for the purpose 
of building unnecessary roads is a social loss. Often a rail- 
road is built as a huge blackmailing scheme, built with the 
preconceived plan of selling out to the competitor. Real 
competition in public service facilities is practically non- 
existent and impossible for any considerable length of 
time. 

In the process of exchange the wastes of competition are 



PLANLESS PRODUCTION 21 

obvious. Several grocery stores in a small town carry 
identical stocks of goods, duplicate floor space, stale goods, 
managers and clerks, while one large store with branches as 
the town became larger could supply the needs of the town 
much more cheaply and could afford to change stock more 
frequently. The distribution of the milk supply where a 
dozen milk wagons serve a single street needs only to be 
compared with the postal delivery system to illustrate the 
wastes of competition. In manufacture the wastes of com- 
petition are equally obvious. Even now that a considerable 
degree of monopoly has been attained, there are far more 
factories than would be necessary under an efficient and 
economical system of production. 

Advertising: One of the greatest wastes in the marketing 
of commodities is in the matter of advertising. Advertising 
has, of course, a legitimate place in business life and would 
to some extent be necessary in a Socialist commonwealth. 
It is necessary to make a market for a new product, to call 
attention to the advantages of new methods over old. But 
it is not necessary to spend huge sums in persuading people 
to buy one brand of a standard article rather than another 
equally good. The excessive advertising of soaps and break- 
fast foods illustrates this waste. 

Advertising also offers a means of influencing the press 
in a manner and to a degree that is socially dangerous and 
undesirable. Newspapers and magazines cannot live with- 
out advertising, and the judicious placing of advertising 
matter, or the threat of the withdrawal of such matter 
already placed has changed the editorial policy of many 
newspapers and magazines. 

The wastes of duplication can also be seen in personal 
advertising by travelling salesmen. The "drummer" equally 
with the printed advertisement has a legitimate function 
to perform in keeping retail dealers in touch with the larger 
business world, persuading them to introduce novelties, 
and saving to the retailer the expense of going to the city 
to place an order. But it is clearly an economic waste when 
salesmen from several wholesale houses visit one small 
grocer within a single week, trying to persuade him to in- 
crease his stock of standard goods. 

Useless vocations : The capitalist system makes necessary 



22 ELEMENTS OF SOCIALISM 

many vocations which are not socially productive, and which 
draw large numbers of the ablest men and women from pro- 
ductive work. With the socialization of capital these voca- 
tions would largely disappear and a heavy tax upon the 
producing population be saved. 

(1) Lawyers: There were 114,703 lawyers in the United 
States according to the census of 1900, the increase of law- 
yers between that and the previous census being much 
more rapid than that of the total population. It is safe to 
say that now (1911) there are more than 140,000 persons 
in the legal profession in this country. Probably nine-tenths 
of the litigation and an even larger part of legal business 
transacted out of court involves property rights and other 
issues directly resulting from capitalism. While the social- 
ization of capital would probably not do away with the 
legal profession in its entirety, it is evident that the number 
of lawyers would be greatly reduced. 

(2) Soldiers: Since the only function of the army and 
navy under capitalism is to extend foreign markets and 
coerce rebels against capitalist authority, militarism cannot 
survive the present industrial system. This will release 
for socially beneficial work not only the 100,000 men in the 
army and navy, but the greater army engaged in the manu- 
facture of the munitions of war, in the provisioning and 
serving of the army and navy, and in the administrative 
bureaus. The cost of militarism to the country, exclusive of 
pensions, is $300,000,000 a year. The same amount spent 
in productive labor would add tremendously to the wealth 
and well-being of the nation. A simple, inexpensive and 
democratic system of national defense could easily be sub- 
stituted for the present wasteful and undemocratic 
system. 

(3) Bankers and brokers: The number of persons in the 
United States engaged in these occupations is constantly 
increasing. In 1870 the number was 10,631. By 1880 it 
had risen to 15,180, and by 1890 to 30,008. By 1900 the 
number was 73,277. Thus the number of bankers and brokers 
has been steadily increasing three times as fast as the total 
population. In addition to this army of men a very con- 
sic lerable part of the 1,000,000 clerks, copyists, bookkeepers, 
accountants and stenographers enumerated in the census of 



PLANLESS PRODUCTION 23 

1900 were employed in banks and brokerage houses. To a 
very large extent, these occupations are socially unproduc- 
tive and wasteful. The banking operations which would be 
necessary under Socialism would employ only an insig- 
nificant proportion of those now directly or indirectly 
engaged in banking. The broker is purely a social parasite, 
and as such would have no place in a rationally conducted 
society. He would be given useful work and thus trans- 
formed from a parasite to a useful and productive member 
of society. 

(4) Agents: Another unnecessary group which would be 
practically eliminated under Socialism is that of insurance, 
real estate and sales agents, which in 1900 numbered in the 
United States 241,333 persons. State insurance would not 
need agents. Land would not be bought and sold. Sales 
agents would have only the limited function of introducing 
new classes of goods with which people were unfamiliar, a 
function similar to that of the travelling salesman under 
Socialism. 

The premium on dishonesty: Competition and the profit 
system make it almost impossible for men to succeed in 
many lines of business without resorting to deception, unfair 
advantage and adulteration of goods. Profits are gained by 
reducing the expenses of production and selling at the highest 
possible price. The sale of cotton and shoddy for wool, the 
addition of glucose to sugar, injurious preservatives in food- 
stuffs, poor building materials sold for good, deodorized eggs 
and embalmed beef, bogus mining stocks, "city lots' ' in a 
Florida swamp, railway rebates, manipulation of legislatures, 
two hundred per cent, on chattel loans and a thousand other 
nefarious devices have been developed by a laissez faire 
competitive system. When one competitor resorts to such 
means the others must follow or go out of business. Restric- 
tive legislation is bitterly fought by personally honest men. 
One method of deception is hardly made illegal before another 
is devised. The spirit of the law is violated and the letter 
upheld. Government inspectors must watch all forms of 
manufacture to detect violations of the law, and it becomes 
an advantage to the manufacturer to bribe the inspector. 
Nor must it be forgotten that practically the entire system 
of government regulation and inspection with its army of 



24 ELEMENTS OF SOCIALISM 

employees and expensive departmental machinery is a social 
waste, made necessary by the nature of capitalism. 

To these evils must be added the danger to the health and 
lives of the workers under the profit system. Every safety 
device costs money and the manufacturer not unnaturally 
hesitates to incur the expenditure lest it reduce the margin 
of profit. One manufacturer may even wish to guard his 
machinery, but find himself unable to do so unless his com- 
petitors do the same, and even he will fight a law compelling 
him to protect the lives of his employees. So it is with 
sanitation. Even a private monopoly is more likely to 
safeguard the health of its employees than is the best indi- 
vidual employer under competition. 

Over-production and under-consumption : In the struggle 
between competing producers it frequently happens that 
the public demand for an article at a certain price is over- 
estimated. Or the price may be temporarily above the 
normal, and manufacturers in either case run their factories 
to their fullest capacity and produce more than can be profit- 
ably disposed of. Competition in selling drives the price 
down until sellers prefer to hold goods rather than to sell. 
The factories are then closed, the employees are thrown out 
of work, and production is only resumed after the accumu- 
lated product has been gradually marketed. A series of 
profitable years often stimulates production to such an 
extent that there comes to be what is known as "general 
over-production. " In nearly all lines of industry the prod- 
ucts exceed the demand at prices which yield a surplus to 
the manufacturer. 

But at the same time that warehouses are loaded with 
unsold goods thousands of consumers are going without 
them, simply because they cannot afford to buy. The real 
problem is not over-production, but under-consumption. 
True, over-production — the production of more than can 
be consumed to the advantage of the consumers — is possible 
in some industries, but general over-production is impossible. 
The capacity of society to expand its wants for more and 
better goods is practically unlimited, and it is always possible 
for the average man to consume the equivalent of what he 
produces. The producers and consumers in general are the 
same individuals viewed from different viewpoints, and if 



PLANLESS PRODUCTION 25 

each family were able to consume the equivalent of what its 
members produced there could be no question of over- 
production. 

The tendency of monopoly in industry is toward the better 
regulation of production and the elimination of over-pro- 
duction and its results. But not until this tendency to the 
monopolization of industry reaches its culmination in social- 
ization will the real problem of under-consumption be solved. 

Crises: The whole period of capitalist industry has been 
marked by periodic fluctuations in business conditions. A 
period of prosperity is followed by a crisis, a panic in the 
world's markets, and a period of business depression and 
social distress. There have been four "major crises" in the 
United States, those of 1837, 1857, 1873 and 1893. The 
major crisis seems to come at intervals of about twenty 
years, that of 1873 being hastened by conditions following 
the Civil War. Minor panics and crises have usually alter- 
nated with major crises, giving a period of business depression 
about once in every ten years. 

Crises are commonly explained as a result of an over- 
expansion of the credit system. Bank credit is loaned to 
business men in too large quantities and on too little security. 
Easy credit tempts men to take too great business risks, 
and when their notes become due they are unable to pay. 
The bank which has guaranteed their obligations then fails, 
and with the close interrelation of banks and business houses, 
one after another is drawn into bankruptcy until the busi- 
ness world is paralyzed. A crop failure may precipitate a 
panic by diminishing the purchasing power of farming com- 
munities, thereby reducing the profits of manufacturers and 
making them unable to meet their notes. Whatever its 
cause, a panic is bound to grow. Business is founded on 
credit and credit is almost destroyed. Even the securities 
on which credit is based fall in value, and money itself is 
hoarded, thus reducing bank reserves. 

This is one side of the problem. On the other side stands 
the fundamental difficulty that the high profits of a pros- 
perous time increase the relative gains of the capitalist class 
as against those of the proletariat. These additional gains 
are transformed into capital which must be re-invested in 
further production. With its lower relative income the great 



26 ELEMENTS OF SOCIALISM 

consuming proletariat cannot buy its own product. Its 
purchases fall off as in the case of the farmers at the time 
of a crop failure. Goods lie unsold in warehouses and the 
profits of manufacturers from which loans were to be repaid 
are not forthcoming. This situation breaks at some point 
and a panic ensues. Unemployment following the panic 
still further reduces the purchasing power of the people, 
and it is only after the surplus has been consumed by the 
capitalist class, their servants and those who produce goods 
and services for them, or after some of the surplus has been 
given away in the form of charity, that the normal level 
can be regained and the entire process begun anew. 

Passing of the competitive era: Unregulated competition 
is largely a thing of the past. Competition through price is 
modified to such an extent that the ruinous cut-throat com- 
petition of a generation ago is practically unknown. There 
is still some degree of competitive price in the wholesale 
trade in staple goods, but it is incidental and relatively 
unimportant. There is also a form of competition in the 
retail trade, consisting of advertising and other attempts 
to "get the business/' but price agreements prevent the 
disastrous consequences of unregulated competition. Thus 
some of the evils of competition are eliminated through the 
increasing magnitude of the business units. In many indus- 
tries this process has gone still further and has culminated 
in monopoly. The tendency of monopoly in industry is 
toward the better regulation of production and the elimina- 
tion of over-production and its results. But it brings with 
it greater concentration of wealth and a higher degree of 
direct exploitation, so that monopoly is not in itself a solu- 
tion of the basic industrial problem. 

The waste of labor: The capitalist system requires at all 
times a great reserve army of laborers who, ordinarily unem- 
ployed, can be called into active service in times when 
production needs to be increased. In the United States 
from one to three million workers 1 capable of adding enor- 

1 This is admittedly a very vague and unsatisfactory statement to 
make upon such an important subject. Adams and Sumner with 
wisdom and truth remark that " there is no more difficult topic in the 
whole range of labor problems, and few so important, as this subject 
of unemployment " (Labor Problems, p. 519). Upon no problem of 
equal importance do we possess less exact information. The number 



PLANLESS PRODUCTION 27 

mously to the social wealth by their labor are constantly idle. 
The relatively inefficient, the so-called "unemployed," who 
might be producing something at least, are usually not 
employed at all, but supported by charity. When to these 
are added the idle rich and their servants and retainers, the 
producers of ostentatious luxuries for the plutocracy, those 
employed in the unproductive and parasitic occupations 
already enumerated, and the vast number of workers whose 
labor is largely wasted through poorly organized private 
enterprise, it will at once be seen what a tremendous 
waste of labor-power is involved in the chaotic and planless 
capitalist system. It is certain that with the elimination of 
all this waste a far higher standard of life than the present 
average could be maintained with comparatively short hours 
of labor. 

Agricultural production : Although the tendency in manu- 
facture and commerce is towards concentration and the 
elimination of the evils of competition, the tendency in 
agriculture is apparently the reverse. The great "bonanza 
farms" of the West and the great plantations of the South 
are being broken up into smaller holdings. The number of 
farms as shown by the census is steadily increasing. In 
Europe this same process is going on. Great estates are 
being divided into small farms and sold to peasants on State 
credit. Is competition, then, effective and desirable in 
agriculture? 

The same evils of lack of coordination and unnecessary 
duplication exist in agriculture as in industry. The inde- 
pendent farmer is not in touch with the consumer and 
cannot tell in advance what acreage it will be worth while 
for him to devote to each crop. The risk which each farmer 
must assume is, in proportion to his capital, very great. 
Drought, frost, hail or insect pests may destroy his whole 
crop and reduce him to poverty. In spite of the apparent 

of unemployed workers rarely falls below one million, even in "good" 
times. In "bad" times it frequently rises to considerably more than 
three millions. For example, 1900 was by no means a very "bad" 
year, but, according to the federal census of that year, thirty-nine 
per cent, of the male workers, 2,069,546 persons, were idle from four 
to six months of the year (U. S. Census, Special Reports, volume on 
"Occupation," p. ccxxxv). The conservatism of the statement in the 
text is evident (cf. Hunter, Poverty, ch. I). 



28 ELEMENTS OF SOCIALISM 

increase in competition, the real tendency is toward its 
elimination. In the first place, there is a marked concentra- 
tion of farm ownership, as we have already seen. 1 In the 
next place, the marketing of farm produce has passed out 
of the hands of the farmers themselves. Instead of being 
able to sell direct to the consumer, they must reach him 
through an army of middlemen whose functions are becom- 
ing more and more concentrated. The industrial functions 
which formerly constituted a large part of farming have 
passed out of the farmer's hands. He no longer makes 
butter and cheese, nor does he peddle milk about the city. 
These functions are capitalized and concentrated. The more 
expensive farm machinery, like threshing machines and 
reapers, are either owned cooperatively or owned and 
operated by those who specialize in that part of farm work 
and make it their business. 

Some of the evils of unrestrained competition are partially 
avoided by the crop reports and recommendations of the 
Department of Agriculture, an example of collective action 
saving the individual from the evil consequences of an 
inefficient individualism. A similar service is performed by 
associations and unions of farmers engaged in producing 
certain groups of crops. So keenly is the necessity of elim- 
inating competition felt at times that violence is resorted to 
for the purpose of regulating production, as by the tobacco 
planters of Kentucky, for example. The separate farm may 
remain, but competition is no more desirable in farming 
than in the other branches of production. 

Where competition may persist: Competition as a regu- 
lator of industry is a failure. It is unscientific, it lacks adapt- 
ability and coordination, it involves too much individual 
risk, it involves social loss in duplication of plants, machines 
and men, it wastes men and money in advertising, it brings 
about adulteration of goods and cheap construction, and it 
increases the danger of underconsumption and crises. But 
a certain kind of competition would remain either under 
private or public monopoly. It is socially advantageous to 
have men and groups of men strive toward greater efficiency. 
A healthy rivalry between farmers to keep up the best farm, 
and to produce crops of the highest quality in the greatest 

i See Table I, p. 11. 



PLANLESS PRODUCTION 29 

quantity adds to the social wealth and well-being, as does 
the rivalry of the same sort between manufacturing establish- 
ments and transportation lines. A competition between men 
for position and public honors when the reward is clearly 
placed on a basis of efficiency and merit, results in a distinct 
social gain. It is entirely possible to retain all the benefits 
of competition without enduring its evils. 



SUMMARY 

1. Industrial competition necessarily involves great social loss 
through the duplication of establishments and services, and in the 
advertising of goods. 

2. The capitalist system makes necessary many socially unproductive 
vocations. 

3. Privately organized industry offers irresistible temptation to 
dishonesty and fraud. 

4. The risks of capitalist industry give rise to periodic crises which 
bear most heavily upon the working class. 

5. Competition in the form of personal and group rivalry for social 
efficiency, position and honor may persist without industrial competi- 
tion. 

QUESTIONS 

1. Why does competition fail as a regulator of industry? 

2. Give examples of unnecessary duplication in industry. 

3. Discuss the Socialist position in regard to advertising. 

4. Explain the relation between the capitalist system and the voca- 
tion of law. 

5. What is meant by over-production? Under-consumption? 

6. Why does capitalist society fail to utilize all of the available 
supply of labor? 

7. How is the farmer affected by the capitalist system? 

8. What would be the place of competition under Socialism? 



Literature 
Ely, R. T., Socialism and Social Reform, Part II. 
Hunter, Robert, Poverty. 

Hyndman, H. M., Commercial Crises of the Nineteenth Century. 
Kelly, Edmond, Twentieth Century Socialism, Book II. 
Reeve, S. A., The Cost of Competition. 
Simons, A. M., The American Farmer. 



CHAPTER IV 

POVERTY 

What constitutes poverty? Our definition of poverty has 
been somewhat anticipated. Poverty is at once an absolute 
and a relative condition. As an absolute condition, it may 
be defined as an insufficient supply of those things which 
are necessary to maintain efficiency in the conditions existing 
at a given time and in a given place. A family may be said 
to be in poverty when its income is insufficient to provide 
for all its members the things necessary to maintain them 
in a state of physical efficiency. This is true regardless of 
the fact that the income would have sufficed to keep another 
family at the standard of efficiency in some other place, or 
in the same place at some other time. Thus poverty is a 
relative condition. The Chinese coolie can supply all his 
felt wants, and maintain himself efficiently, according to 
Chinese standards, on a wage which would mean starvation 
to an Italian laborer. In turn the Italian laborer can main- 
tain himself efficiently and save money on a wage entirely 
insufficient to efficiently maintain an American workingman. 
A family with a three dollars a day standard — that is, a 
family living under conditions in which it takes three dollars 
a day to procure the things necessary to physical efficiency — 
is just as poor on an income of two dollars a day as a family 
with an income of fifty cents a day where the necessities of 
physical efficiency can be procured for seventy-five cents a 
day. 

Whenever the income of a family is so low that it does not 
make possible the maintenance of all its members in a state 
of efficiency, and there is a lack of any of the tilings essential 
to the attainment of that end, there is poverty. When the 
income falls so low that it must be augmented by public 
or private charity, we have the development of poverty 
to pauperism. This condition is poverty at its worst. Pau- 

30 



POVERTY 31 

perism is the last refuge of the weak, the aged, the sick and 
infirm, and other victims of the human struggle. 

The extent of poverty: There is no way of obtaining a 
very accurate measure of the amount of poverty existing 
in any city or in any nation. The extensive statistical work 
of the United States Census Bureau throws very little light 
on American poverty. Practically the only useful data avail- 
able have been gathered by students and social workers in 
private investigation or are contained in the reports of public 
and private charities. 

For England the investigations of Mr. Charles Booth 
in London and Mr. B. S. Rowntree in York are the most 
illuminating sources of information. Mr. Booth found that 
of the population of London about 30 per cent was living 
below the poverty line, and in York Mr. Rowntree found 
27.8 per cent in poverty, and that in 1899, a year when 
trade was more than usually good. The standard of living 
in America is a little higher than the English standard. 
Therefore, the poverty line must be set a little higher here 
than in England to make any comparison of value. If this 
be done, there is little or no evidence that conditions here 
are much better than in England. During the year 1903 
the public authorities in Boston aided 136,000 persons, or 
more than 20 per cent of the population. The value of 
these figures is greatly impaired by the fact that we have 
no means of ascertaining how many duplications they con- 
tain. That the number of such duplications is considerable 
will not be doubted by anyone who is at all familiar with 
the subject. On the other hand, the figures do not take into 
account the large number of persons relieved by voluntary 
philanthropic agencies and private individuals. That these 
would more than cancel the number of duplications in the 
statistics of public relief is beyond question. So we get 
the startling fact that at least 20 per cent of the population 
of the city of Boston reached the level of pauperism in the 
year 1903. Of course, the number of poor persons, that is, 
persons whose income was insufficient to provide the things 
necessary to the maintenance of efficiency, was very much 
higher. By no means do all who are poor apply for charity. 
Self-respect keeps many who are desperately poor from 
doing so. 



32 ELEMENTS OF SOCIALISM 

It is estimated by Robert Hunter that in our large cities 
there are rarely less than 25 per cent of the people in poverty. 
Studies of unemployment tend to confirm this estimate. 
Fully 30 per cent, of the wage-earners are unemployed for a 
portion of the year, their incomes are irregular and they are 
therefore extremely liable to fall below the poverty line. 
To unemployment must be added the disability of wage- 
earners by sickness and accident. The eminent authority on 
vital statistics, William Farr, estimates that for every death 
two persons are, on an average, seriously ill, and three per- 
sons so ill as to require medical attention. 1 Dr. Farr was 
one of the greatest, if not the greatest, of all the statisticians 
of history, and his estimate was based upon an exhaustive 
study of the mortality and morbidity experience of the 
United Kingdom. As Professor Irving Fisher remarks, 
there is every reason to believe that Farr's conclusion is 
nearly as valid as when he wrote, about forty years ago. 3 
If, then, we apply Farr's estimate to the United States, in 
which about 1,500,000 persons die each year, we get the 
startling result that something like 3,000,000 persons in 
the United States are at all times seriously ill. Of course, 
we have to be cautious in thus attempting to apply figures 
based upon British conditions a generation ago to the United 
States of the present day. Still, Professor Fisher, after 
checking the result in various ways, concludes that the esti- 
mate based upon Farr's crude rule is a fairly conservative 
one. 3 

In 1900, of the total population of known ages in Con- 
tinental United States the age-group twenty to sixty-four 
years inclusive constituted 51.5 per cent. Assuming that 
percentage to have been about the same in 1910, there were 
in that year 47,365,717 persons between the ages of twenty 
and sixty-four years, inclusive. Mr. Edward Bunnell 
Phelps, editor of The American Underwriter, and one of 
the best statistical authorities in America, has calculated 
that Professor Fisher's estimate of 3,000,000 seriously ill 
is too conservative; that there are at least that number of 
persons in the United States between twenty and sixty- 

1 Farr, Vital Statistics, pp. 512-513. 

2 Report on National Vitality, by Professor Irving Fisher, p. 34. 

3 Fisher, op. cit. 



POVERTY 



33 



four years of age, inclusive, ill enough to require medical 
attendance. And these years, it will be noted, are the most 
important working years. In furnishing this estimate to 
the present writers, Mr. Phelps calls attention to the fact 
that some seven years ago one of our very best statistical 
authorities tabulated the number and percentages of Odd 
Fellows reported as sick in twenty-nine different States, 
and found that of the total membership of that organization 
in those States an average of 7.85 per cent, were sick. One 
of the large health and accident insurance companies pub- 
lishes a carefully tabulated statement which shows that on 
an average ten per cent, of its policy-holders between the 
ages of twenty and sixty-four years, inclusive, are sufficiently 
ill to warrant the payment of sickness claims. Dr. Farr's 
estimate that 2,000,000 in the United Kingdom are ill enough 
to require medical attention was equivalent to saying that 
that 6.3 per cent, of the total population was sick. The 
medical director of another large health and accident com- 
pany estimated that in the United States, on an average, 
fully 5 per cent, of all persons in the age-group named are 
ill enough to need medical attention. If we average these 
several estimates and apply that average to the population 
in the age-group named, the result is almost startling: 



ESTIMATES OF HABITUAL ILLNESS IN UNITED STATES 



Basis of Estimate. 



Popu- 
lation, Ages 
20-64. 



Probable 
No. of Cases 
of Sickness. 



Odd Fellows' experience, 7.85% of . . . . 
Health Company's experience, 10% of. 
Medical Director's estimate, 5% of . . . . 
Dr. Farr's figures, 6.3% of 



47,365,717 
47,365,717 
47,365,717 
47,365,717 



3,718,209 
4,736,572 

2,368,286 
2,984,040 



Total number of sick persons estimated according to the average of 
the four estimates 



3,451,777 



It would seem, therefore, that, on an average, at least 
3,000,000 persons between the ages of twenty and sixty-four 
are sick. Not all of these are of the working class, for 
the fires of fever burn in mansion and hovel. Many 
are wealthy, many are of the professional class. How many 



34 ELEMENTS OF SOCIALISM 

are bread-winners with families dependent upon them we 
do not know. Probably not less than 1,500,000. We do 
know that diseases of all kinds, and especially the most 
dangerous, like tuberculosis and pneumonia, are more 
prevalent among the wage-earners than among any other 
class. 1 It is perfectly obvious, therefore, that disease 
greatly adds to the poverty of the masses. According to Mr. 
Hunter there were in 1904 at least 10,000,000 persons in 
poverty in the United States. There is no evidence that 
poverty is diminishing. All the organized charities are con- 
stantly enlarging their scope, and are pressed to the limit 
of their capacity in relieving misery. The cry of helplessness 
which ascends from our great organized agencies for phil- 
anthropic relief is appalling. 

The pauper: The greater part of the families living in 
poverty do not become paupers. They strive to maintain 
their self-respect. They struggle bravely to increase their 
incomes, and by small economies manage to avoid applying 
for relief. Even the very poor will sacrifice part of their 
meagre incomes to help their neighbors and friends tide 
over a period of exceptional distress and to save them from 
becoming paupers 

But the typical pauper has lost the self-respect of poverty. 
Take the pauperism of the tramp, for example. The tramp 
is not necessarily unhappy, nor does he suffer keenly. He 
cheerfully relies upon his stronger neighbors, or upon organ- 
ized charities, to keep him from starvation. This form of 
chronic pauperism is a disease of character, more hopeless 
than crime itself. But it cannot be denied that capitalism 
puts a premium on this parasitic life. The tramp on the 
whole has an easier life and is often much better fed than the 
hard-working laborer. It is estimated by Mr. James Forbes, 
Director of the National Association for the Prevention of 
Mendicancy, that there are not less than 250,000 such tramps 
in the United States The tragedy of this aspect of the 
problem lies in the fact that, very often, the most promising 
and healthy boys of the working class find their way into 
the ranks of trampdom. The monotony of the average wage- 
earner's life, and the periodic unemployment which destroys 
ambition and thrift, are perhaps mainly responsible for this. 

1 Cf. Fisher, op. cit., p. 22. 



POVERTY 35 

Another form of chronic pauperism, closely allied to that 
of the tramp, but differing from it in important respects, is 
that of the shiftless and inefficient families who are always 
dependent upon public and private charity. If there is a 
man at the head of the family he is generally unemployed, 
even in times when there is relatively little unemployment. 
The truth is that he is unemployable. The cause may be 
inefficiency and inability to apply himself to any task, how- 
ever simple, or it may be sickness, or drunkenness, which 
is itself a form of sickness. Or the cause of his failure 
may be the characteristic which we call laziness. But lazi- 
ness is probably always a result of defective conditions closely 
allied to poverty, and rarely or never the primary cause of 
poverty. Back of the inertia, lack of ambition and staying 
power which manifest themselves in what we call laziness 
are the untoward conditions born of poverty, such as mal- 
nutrition, neglect of disease, lack of training, failure to 
discover in the formative years of life the natural aptitudes 
of the boy who thus develops into the pauper. How many 
families of this class there are we have no means of ascer- 
taining in the present chaotic state of our statistics of relief. 
That the number is frightfully large is certain. They go 
from one charitable agency to another until they have gone 
the entire round, and then they begin the circuit anew. 

To these classes of paupers who are the victims of moral 
deficiencies, diseases of character which flourish in capital- 
ist society, must be added the large class whose pauperism 
is less directly the result of moral disease, but is the result 
of old age, physical infirmity due to disease and accident, 
the idiotic, the insane, the widowed and orphaned. There 
are more than a quarter of a million such men, women and 
children living in institutions at the public expense, in addi- 
tion to the vast number supported outside by public and 
private philanthropy. Altogether, pauperism presents an 
appalling picture of human wreckage. 

Poverty and the child: Nowhere are the ill effects of 
poverty more strikingly manifest than in the lives of the 
children of the poor. During the period of rapid growth 
in mind and body poverty creates an environment for the 
child which robs it of its chance of a full and healthy develop- 
ment, without which an efficient manhood or womanhood 



36 ELEMENTS OF SOCIALISM 

will be impossible. Robbed of physical and intellectual 
opportunities in the most important years of all, the child 
of poverty is heavily burdened in the race of life. 

It is a well-known fact that the death rate among the poor 
is very much higher than among the well-to-do. This is 
especially true of the infantile death rate. Dr. Charles R. 
Drysdale, an eminent authority, declared some years ago 
that the death rate of infants among the rich was not more 
than 8 per cent., while among the very poor it was often 
as high as 40 per cent. In aristocratic Brookline, Mass., the 
death rate of children under one year per 1,000 births in the 
year 1900 was 96.9, while in Fall River, an industrial town 
in the same State, it was 260.2. Yet the experts say that, 
upon the whole, the babies of the poor are just as strong 
and healthy at birth as those of the rich, and that post- 
natal, rather than pre-natal, conditions are responsible for 
the terrible difference in the death rate. Except for poverty 
and other evils resulting from capitalism, there is no apparent 
reason why the death rate of babies anywhere in the United 
States should be materially higher than in Brookline. This 
means that in the prosperous year of 1900 more than 200,000 
babies under one year of age needlessly died in the United 
States. Not all were victims of poverty, of course, but 
a vast majority were victims of poverty, ignorance, lack of 
care and other evils which appear to be inseparable from 
capitalist society. 

Terrible as these figures are, they by no means represent 
the worst evils of poverty as it affects the child. At least 
the suffering of those who die in infancy is of short duration. 
Death is all too often an escape from long continued priva- 
tion and suffering. Recent investigations in this country 
and in Great Britain have revealed the fact that an alarming 
number of poor children of school age are chronically under- 
fed and otherwise neglected. Victims of malnutrition and 
diseases incidental to malnutrition, an alarming percentage 
of the children in our public and parochial schools are not 
only backward in their studies, but as a result of the com- 
bination of their physical and mental disadvantages they 
are continually augmenting the ranks of the inefficient who 
fall into pauperism, the shiftless, the intemperate, the vicious, 
the lazy and unemployable. 



POVERTY 37 

Closely related to these conditions is the evil of child 
labor. Of the great army of children employed in mines, 
factories, workshops, street trades and farming occupations, 
the vast majority are victims of poverty. That a large num- 
ber of such children come from families who manage to 
keep slightly above the line of poverty is indisputable, but 
it must be borne in mind that very often such families main- 
tain that position only by adding the wages of the children 
to those of the adult bread-winners. Where a child earns 
two dollars a week, for instance, that sum may mean the 
difference between staying above the poverty line or falling 
below it. It may mean the difference between living in a 
hovel on a mean street where it is hard to be "respectable," 
and living in a better neighborhood. One terrible fact is 
that the children who are forced thus early into the labor 
market are the children least fitted for it. Child labor is 
quite unnecessary in this age of marvellously productive 
machinery and unemployed adults. But if it were necessary 
for little children to labor at all, those chosen for labor should, 
be the strongest and best fitted to bear the strain. But the 
strongest and best developed children are the sons and 
daughters of the rich and well-to-do classes, and these are 
never torn from the playgrounds to enter the factories and 
mines or to face the perils of the street trades. It is always 
the children of the poor who are forced into the labor market, 
and the poorer the family the more necessary becomes the 
income derivable from the labor of its children. Thus child 
labor is a link in a chain of vicious circumstance. The 
child whose infant years were spent in an environment 
which weakened it physically and so sapped the foundations 
of all strength, mental and moral as well as physical, and 
whose years of school life continued the cruel process, is 
subject to the further weakening of all that makes for strength 
of body, mind and character. 

The prevention of child labor : It is manifestly impossible 
to end child labor by appealing to the parents of the children. 
The pressure of poverty forces them to send the boy or girl 
to work. Meagre though the wage of the child may be, it 
is often an important item in the family budget. It is vain 
to urge that the child becomes a competitor of his father, 
that child labor leads to low wages for adult workers. The 



38 ELEMENTS OF SOCIALISM 

parents know that. But they also know that the process 
is not an immediate one, that the employment of the indi- 
vidual child does not immediately and directly reduce the 
wages of the particular adult worker. The process is a slow 
and indirect one, subtly hidden in the complex mechanism 
of capitalist production. The wage of the child, on the other 
hand, is a direct and immediate gain. It means increased 
comfort at once. Likewise, it is useless to appeal to the 
employers to put an end to child labor. So long as child 
labor appears profitable the capitalist will not end it in 
response to appeals for sympathy for the child. In com- 
petitive industry the most kindly employer must take all 
the advantages for profit making which his competitor 
takes or go out of business; in industries wholly or partially 
monopolized the incessant demand of the stockholders for 
dividends forces the directors and managers to employ 
every profitable device and method. 

To stop child labor, then, legislation is resorted to. Every 
attempt to enact such legislation is bitterly opposed by those 
who profit from child labor. The laws when enacted are 
flagrantly violated. Still, despite all difficulties, something 
has been done in the direction of checking the worst abuses. 
The Socialist favors every effort to prevent child labor by 
legislation, and nearly every Socialist party in the world de- 
mands the prohibition of the labor of all children under 
sixteen years of age. But the Socialist sees in child labor 
only another symptom of social disease inseparable from 
the capitalist system, and believes the disease to be remedi- 
able only through the socialization of production and ex- 
change. 

Poverty and old age : One of the most tragic phases of the 
problem of poverty is that of the aged poor. After a life- 
time of hard work thousands of sober and industrious men 
and women pass the years of old age, when they are no 
longer able to work, in destitution, dependent either upon 
charitable agencies, or upon relatives who by contributing to 
the support of their dependent relatives diminish their oppor- 
tunities to save a competency for their own old age. Obvi- 
ously, there must be something radically wrong with a social 
system which does not make it possible for a worker after 
forty years or more of industry to live comfortably for ten, 



POVERTY 39 

fifteen or twenty years when he is no longer able to work. 
Thrift is no remedy for the evil, and it is useless to argue 
that the workers should save enough to keep them in their 
old age. That is possible in some cases. It is a fact that 
many of the aged poor might have been enjoying comfort 
had they been prudent and frugal in early life. But the 
average wage-earner does not earn more than enough to 
maintain himself and family in efficiency, even if every 
penny of his earnings is wisely directed to that end. For 
the average wage-earner saving is only possible at the expense 
of efficiency, either that of himself or some member of 
the family. Saving under such conditions means stinting, 
either by reducing the amount or lowering the quality of 
food, clothing or education, or by reducing the comforts 
and advantages arising from good housing accommodations. 

To those who have been accustomed to live in relative 
comfort dependence in old age involves the most intense 
suffering and humiliation. Of all the fears which beset the 
working class the fear of a beggarly old age is perhaps 
the most generally felt and the most dreaded. To avoid 
its realization men and women of the working class sacrifice 
much present comfort, and many of the necessary requisites 
of an efficient life, in order that they may have something 
upon which to rely in their old age. Even when a little 
is saved in this manner, the difficulties of safe investment and 
the dangers of loss are great. 

Evil results of poverty: Poverty is not only an evil in 
itself, but it is the direct cause of many other evils. Crime 
is to a very large extent the result of poverty. The com- 
monest of all forms of crime is theft, and it is perfectly well 
known that robbery, burglary, pickpocketing, and other 
crimes of this class increase with every depression in trade. 
As wages decrease and the number of the unemployed 
increases the number of cases of larceny of all kinds grows. 
There is more theft in winter than in summer. In general 
it may be said that whenever the conditions of life become 
harder than usual for the poorer classes crime increases. 
Crime is the reaction of the relatively strong man to economic 
failure and oppression, just as pauperism is the refuge of the 
weak. 

While crime is by no means confined to the male sex, the 



40 ELEMENTS OF SOCIALISM 

true female counterpart of crime in the male is prostitution. 
The life of a prostitute is not attractive and few enter it 
from choice. The life involves social ostracism and loss 
of self-respect, together with the abandonment of all that 
women value most highly. Except in the cases of a relatively 
small number of moral degenerates, the ranks of those who 
depend upon prostitution for a living are recruited from those 
who have failed otherwise to maintain themselves. Wherever 
investigations have been made into this subject a very close 
relation has been shown to exist between low wages and 
irregular employment and prostitution. Universally, the 
proportion of prostitutes who find their way into the ranks 
of those that walk in shame from such poorly paid occupa- 
tions as those of dressmakers, milliners, saleswomen, button- 
hole makers, cloakmakers and the like is very large. What 
is even more significant is that every depression of trade 
affecting these and similar occupations in the form of unem- 
ployment or decreased wages is immediately followed by a 
large increase in the number of prostitutes. At the National 
Purity Congress in 1895 the number of public prostitutes 
in the United States was estimated at 230,000. Other 
estimates are much higher, one investigator placing the 
number at 600,000.* Whatever the number may be, it is 
probably safe to say that five-sixths of all public prostitutes 
are victims of poverty. 

The relation of poverty to disease has already been suffi- 
ciently noted for our present purpose. It is not only one of the 
most active causes of such diseases as tuberculosis and 
pneumonia, but it is an important factor in the causation 
of that form of disease which is so often mistakenly treated 
as a crime, drunkenness. It is often said that drunkenness 
is a principal cause of poverty. That it frequently appears 
as the direct and immediate cause is true, but it must not 
be forgotten that it is itself, in many cases, the product of 
poverty and its concomitant conditions, overwork to the 
point of exhaustion, malnutrition and physical weakness, 
crushed hope and desperation of despair. Here as in so 
many other directions poverty tends ever to perpetuate 
itself. That is its worst feature 

Causes of poverty: Not so long ago it was very generally 
1 Cf . Bliss, Encyclopedia of Social Reforms. Art. "Prostitution." 



POVERTY 41 

contended that poverty was almost entirely due to the 
faults of the poor themselves, to moral defects in the indi- 
vidual rather than to defects in the economic and social 
environment. That view has been abandoned. Dr. Edward 
T. Devine, for example, admits that "the tradition which 
many hold that the condition of poverty is ordinarily and 
as a matter of course to be explained by personal faults of 
the poor themselves is no longer tenable. Strong drink 
and vice are abnormal, unnatural and essentially unat- 
tractive ways of spending surplus income." 1 The Socialist 
takes the same view of the problem and to all such questions 
as "Does poverty exist because people are shiftless, lazy, 
intemperate, dishonest or depraved, or because they have 
too many children?" answers with a vigorous negative. He 
agrees with Dr. Devine further "that personal depravity 
is as foreign to any sound theory of the hardships of our 
modern poor as witchcra t or demoniacal possession; that 
these hardships are economic, social, transitional, measurable, 
manageable." 2 He holds that all foregoing moral distressful 
phenomena are the direct and indirect results of conditions 
arising out of the economic system and inherent in its very 
nature. In a system which enables a relatively few owners 
to appropriate a large part of the products of industry 
regardless of effort on their own part, and where the actual 
producers can rarely take more than sufficient to keep them 
from day to day and week to week, poverty is inevitable. 

Charity not a solution of the problem : Society no longer 
intentionally permits any of its members to starve. When 
extreme poverty confronts us an attempt is usually made to 
relieve it. For this purpose numerous and costly organiza- 
tions exist, and in addition to this organized charity there 
is a large amount of personal effort directed to the same end. 
The effect of charity, however skillful and well-intentioned 
its dispensers may be, is often disastrous. It places the 
individual in a position of cringing dependence and destroys 
self-respect by invading the privacy of the home to make 
inquiries which are necessary to prevent imposition. 

But apart from these criticisms, and even if none of them 
were true, it would be a sufficient criticism to make of the 

1 Charities and the Commons, Vol. XIX, p. 1104. 

2 Misery and Its Causes, by Edward T. Devine, p. 11. 



42 ELEMENTS OF SOCIALISM 

attitude of those who hold that charity is a sufficient solu- 
tion of the poverty problem to point out the confessed 
inability of our charity organizations to remove more than 
a tithe of the poverty existing in society under normal con- 
ditions. There is no large city in America in which any or 
all of the philanthropic agencies are or have ever been in a 
position to raise sufficient money to raise above the poverty 
line all who have fallen below it. This fact was shown in a 
striking manner during the discussion, in 1907, of the report 
of the New York State Conference of Charities and Correc- 
tions of the committee of that body on wages and the 
standard of living. The committee reported that the lowest 
amount upon which a family of five could be supported in 
decency and health in New York City was about eight 
hundred dollars a year. Commenting upon the fact that 
many thousands of families have a total income of ten dollars 
a week or less, and that after allowances are made for sick- 
ness, holidays and occasional unemployment, the total income 
of such families does not exceed four hundred and fifty 
dollars a year at best, Dr. Devine frankly admitted that it 
would be impossible for organized charity to make up the 
deficiency for all such families, and so place them just above 
the poverty line. Such a policy would, he declared, lead to 
financial bankruptcy. 1 In other words, the charitable 
societies cannot hope to add to the wages of those workers 
whose incomes are inadequate to maintain themselves and 
families at the point of efficiency, enough to enable them 
to do so. Therefore, there must still be poverty which 
organized charity can neither promise nor seriously hope to 
remove. 

The Socialist view of poverty : Any open-minded Socialist 
must recognize that some of the evils of poverty can be 
relieved without disturbing the present social order. Muni- 
cipal milk stations for the supply of milk for infants, free 
meals for school children, medical inspection, child labor 
laws, farm colonies for the unemployed — these and a multitude 
of similar reforms are possible within the capitalist system. 
But so long as capitalism remains and wages are determined 
by competitive methods poverty will continue to blight the 
world. It will be removed only when the basic industries 

1 Charities and the Commons, Vol. XIX, p. 10S3. 



POVERTY 43 

have been brought under social ownership and control. 
So, while rejoicing in all measures of amelioration, the Social- 
ist concentrates his attention upon abolishing the funda- 
mental causes of poverty, trusting that the effects will dis- 
appear when the causes are removed. 



SUMMARY 

1. A family is in poverty when its income is insufficient to provide 
those things which are necessary to maintain the efficiency of its mem- 
bers in a given time and place. 

2. The effects of poverty are most evident in the lives of children. 
Under conditions of poverty the infantile death rate is very high and 
the growth of the minds and bodies of children is impaired. 

3. Poverty is a direct cause of crime, prostitution, disease and 
intemperance. 

4. Charity is entirely inadequate for the relief of poverty, and con- 
tributes nothing toward its cure. 

QUESTIONS 

1. Distinguish between poverty and pauperism. 

2. What basis have we for estimating the extent of poverty? 

3. What are some of the causes of pauperism? 

4. Discuss the causes and the social effects of child labor. 

5. Show how poverty acts as a cause of crime. 

6. What is the social effect of charity? 

7. What is the Socialist attitude toward poverty? 

Literature 

Devine, E. T., Misery and Its Causes. 

Fisher, Irving, Report on National Vitality , Its Wastes and Conserva- 
tion. 

Hobson, John A., Problems of Poverty. 

Hunter, Robert, Poverty. 

Rowntree, B. S., Poverty, a Town Study. 

Spargo, John, The Bitter Cry of the Children. The Common Sense of 
the Milk Question, Chaps. I- VI. 



CHAPTER V 

LEISURE AND LUXURY 

Capitalist and manager : The capitalist as such has nothing 
to do with the management of the industry in which he 
holds stock. As a capitalist owner of a textile mill he need 
not know the difference between gingham and worsted. 
He may be a child or an idiot. If he does useful work in the 
management of the industry, as capitalists of a generation 
ago often did, he is to that extent a laborer and is entitled 
to the rewards of labor. As a matter of fact, he usually 
gets these rewards over and above his income as a capitalist. 

The shrewd business man who so directs an undertaking 
that it yields an increasing revenue without raising prices 
or lowering wages is undoubtedly performing a real service 
for society, and should receive a salary proportionate to 
that service. But when the gain comes through monopoly, 
special privilege, injury to the consumer or injury to the 
producer, society receives no benefit for which it should be 
called upon to make any payment. The business man who 
works for himself and against the interests of society deserves 
no consideration and no reward. 

Socialists do not wish to deny to the real captains of 
industry a reward equivalent to the social value of their 
share in production, any more than they wish to deny to 
the least efficient laborer the equivalent of the social value 
of his share in production. Socialists do charge, however, 
that even the salaries of those engaged in the management 
of industry as it is at present conducted are not proportioned 
to the share of the recipients in production. "To him that 
hath shall be given" seems to be the rule to-day, as of old. 
Men who have wealth or influence with the wealthy can 
obtain positions with salaries far in excess of the value of the 
services rendered. Capitalism also richly rewards services 
which are socially undesirable and unnecessary. Brokers, 

44 



LEISURE AND LUXURY 45 

speculators, commission merchants, corporation lawyers, 
lobbyists, and many other groups are paid large salaries 
although society would be better off if they did not exist. 

Unearned wealth: The incomes of capitalists and land- 
owners are unearned. They bear no relation whatever to 
the productivity or the needs of those who receive them. 
There are other methods of getting unearned incomes, such 
as betting, swindling, begging and plain robbery. These 
methods are admittedly dangerous, demoralizing and crim- 
inal. But any form of unearned income is regarded as socially 
harmful by the Socialist, except where it takes the shape of 
a social gift for the maintenance of one who is incapacitated 
from labor. The unearned income of the capitalist is not 
a social gift, but a sum extorted from the producers through 
the mechanism of our industrial system. 

Inheritance: It is difficult to see why children, distant 
relatives or strangers should inherit the wealth of a deceased 
man in the production of which they have had no share. 
We no longer recognize the right of inheritance to political 
offices or honors. Hereditary royalty, nobility or dignity 
is almost universally looked upon as undesirable, but capital- 
ist society upholds the much more dangerous inheritance of 
capital with the same unquestioning faith that feudal society 
had in hereditary royalty. The fortune accumulated by a 
man of ability in a lifetime of honest effort may be inherited 
by a son or other heir, who, despite his mediocre ability, 
and the fact that he renders little or no service to society, 
thereby enjoys all the benefits of wealth. 

It is not the inheritance of purely personal property to 
which the Socialist objects, but the inheritance of capital, 
stocks and bonds representing ownership and control of 
industry, and land titles which confer upon their owners 
the power to absorb part of the wealth of society in the form 
of incomes derived from the exploitation of the labor and 
needs of others. There is no reason why society should assert 
the ownership of those forms of personal property which 
have none of the foregoing characteristics, except in such 
rare and exceptional circumstances as might lead even a 
capitalist State to do the same. 

Advantages of wealth: From the point of view of social 
power it is the ownership and control of industry rather than 



46 ELEMENTS OF SOCIALISM 

income which counts. The man who owns can control. 
But aside from this social power a large income gives advan- 
tages which may not in themselves be harmful to society, 
but the enjoyment of which by the few to the exclusion 
of the many constitutes a social injustice. Among these 
advantages are education, travel, luxurious and beautiful 
homes, better care when ill, protection of childhood and old 
age. The man of wealth is free to seek the most skill- 
ful physicians and the most healthful climate. He need 
not wait for complete prostration before seeking medical 
aid. From these advantages the poor man is practically 
debarred. The higher death rate among the poor than among 
the rich is a matter of common knowledge. Among 10,000,- 
000 well-to-do persons the number of yearly deaths is prob- 
ably not more than 100,000; among the best paid wage- 
earners the number is probably not less than 150,000; and 
among the poorest paid workers the number is probably not 
less than 350,00c. 1 Money may purchase life itself. 

The privilege of being able to devote his life freely to the 
work of one's choice, regardless of its income yielding power, 
is inestimable. Genius is not necessarily associated with 
money-making ability, and many of the greatest artists and 
writers have been able to develop their talents only through 
their freedom from the necessity of making a living. 

Previous to the industrial revolution the productivity of 
society was insufficient to support more than a relatively 
few in comfort and to afford leisure for cultural develop- 
ment. With the development of labor-saving machinery 
it becomes possible, for the first time in history, to realize 
any normal and healthy desire and still perform a just share 
of the necessary labor of society. Sufficient leisure for the 
development of talent is demonstrably possible for all in a 
society in which the most highly developed methods of 
production and organization are fully utilized. Culture 
and labor need not be divorced in modern society. 

The leisure class : The existence of social classes, generally 
hereditary in character, exempt from the work of production 
and thus able to devote themselves exclusively to certain 
honorific employments, such as warfare, politics and relig- 
ion, has been characteristic of every age since the end of 

1 Poverty, by Robert Hunter, p. 144. 



LEISURE AND LUXURY 47 

primitive communism. These classes have played a tre- 
mendous part in social evolution, for without them culture 
and civilization could hardly have been developed and pre- 
served. The Pericleian Age in Greece, for example, was 
only possible with many slaves for every free citizen. 

Under capitalism the predominant leisure class has been 
placed upon an entirely new basis, that of wealth regardless 
of any real or pretended services to society. This class is 
also to a large extent hereditary in character. It maintains 
itself by the exercise of its power of control over the means 
of production as surely as did the nobility of feudal times 
through land ownership. Inheritance of capital crystallizes 
class distinctions and makes equality of opportunity impos- 
sible. The inheritance of great landed estates in feudal 
times carried with it a sense of responsibility to society, and 
especially to the serfs and peasants. The feudal lords at 
least served society to the extent of assuming the risks and 
responsibilities of warfare, and of preserving, in conjunction 
with the church, the culture and civilization of the past. 
But this new leisure class performs no social service whatever. 
The inheritance of capital tends to perpetuate a class having 
no direct contact with the sources of its income, no feeling 
of social responsibility and no knowledge of the life of the 
producing class. The most conspicuously idle and extrava- 
gant of the capitalist class, those who do not perform even 
the most perfunctory directive functions, and cannot be 
considered as other than social parasites, live on incomes 
derived from inherited capital. Now that politics, art, 
education, and even military protection, are possible upon 
a thoroughly democratic basis, the Socialist sees no reason 
for maintaining in luxury a social class which does not and 
cannot justify its existence by some definite social service 
which it performs with peculiar efficiency. 

Ostentatious expenditure: Wealth in the form of capital 
gives the owner power over the lives of men. Wealth with 
large income enables the possessor to enjoy comforts and 
luxuries denied to other men, and the possession of wealth, 
or even the appearance of being wealthy, brings honor and 
social prestige. There is therefore a great temptation to 
spend large sums ostentatiously in order to be regarded as 
rich, rather than for the direct pleasure or benefit the 



48 ELEMENTS OF SOCIALISM 

expenditure will bring. Expensive dinners and balls, ex- 
travagant houses, furnishings and dress, and e\en philan- 
thropy, are frequently attributable to the desire for social 
prestige and honor. Often this object is attained by the 
wearing of certain forms of dress, or living in such a way that 
productive labor is impossible, thereby indicating that one 
belongs to a class wealthy enough to be free from labor. 
The silk hat, the monocle, the walking stick and the patent 
leather boots of an English gentleman are neither comfort- 
able nor especially useful, but it is plainly evident that no 
one could do an hour's honest work in such an outfit. In 
its origin, at least, that fact is responsible for the outfit. 

Ostentatious expenditures by the very wealthy indirectly 
help to protect them in their social position. In the effort 
to share in the social homage and prestige bestowed upon 
rich families many a middle-class family imitates these 
extravagances to the point of financial ruin, and so is effec- 
tually prevented from obtaining real power. If we analyze 
our expenses, even the relatively poor among us will find 
that a surprisingly large proportion goes for ostentation, 
but this can hardly be avoided. As long as class distinctions 
are so great it is practically necessary to imitate and con- 
form, particularly in dress, or else be subject to ridicule. 
The necessity of keeping up these ostentatious expenditures 
in order to maintain appearances constitutes in the aggregate 
an immense social loss. If it were not for the social necessity 
of keeping up the appearance of prosperity, real prosperity 
would be more easily obtained, and labor could be applied 
to a greater social advantage. The pace in ostentatious 
expenditure is set by the idle rich and everyone else is com- 
pelled to live as nearly as possible to that standard under 
the penalty of being stamped as socially inferior. 

The servant and society : The productivity of labor having 
increased much more rapidly than wages, the socially pro- 
ductive laborers themselves cannot purchase and consume 
their own product. Production must either be checked, 
therefore, and the resulting army of unemployed supported 
by charity, or the non-producing class must be so increased 
that the social product may be consumed. The servants 
and retainers of capitalism and the producers of certain 
kinds of luxuries for the capitalist class perform this function 



LEISURE AND LUXURY 49 

by assisting the capitalist class in the consumption of goods. 
At the same time, they add to the sum of personal and 
social satisfaction which the owning class is able to enjoy. 

It may well be questioned whether a rational society would 
tolerate the existence of a servant class, except for the service 
of the sick and infirm. Such service might be regarded as an 
occupation of peculiar dignity and honor. But the idea 
that the whole life of one human being should be spent doing 
the work of and making comfort for another human being 
capable of doing it for himself is repellant to the ideas of 
freedom and equality. Many a rich idler whose life is of 
no benefit to society not only consumes an income repre- 
senting the labor of many producers, but wastes still more 
on the employment of personal servants. The rich man 
must have his valet and the rich woman her maid to assist 
them in dressing. The spectacle of one healthy person 
employing another healthy person to button his shoes or 
comb her hair, as the case may be, is so ludicrous that the 
parasitical nature of these forms of service is obvious. But 
a large part of the work performed by the servant class is 
none the less parasitical because less obviously ludicrous. 

We are not at present concerned with the question whether 
or not this form of useless labor will wholly disappear with 
the coming of Socialism. What concerns us is the social 
waste in present society represented by the servants and 
retainers of the capitalist class. It is true that a large 
majority of those engaged in ordinary domestic service 
are employed by the large middle class, rather than by the 
relatively small class of the very rich, but the number of 
servants and retainers of the latter class is greater than the 
entire number of domestic servants. In this class of servants 
and retainers is included such personal servants as valets, 
footmen, waiters, and the like, as well as the secretaries, 
private tutors, hired "companions" and the physicians who 
confine their professional service to the wealthy for extrava- 
gant fees. It includes also the editors, publicists, lawyers 
and preachers whose energies and talents are devoted to 
the task of defending the present social order for pay. The 
burden of the capitalist class upon the producers can only 
be realized when its vast army of servants and retainers is 
taken into account. From an economic point of view, the 



50 ELEMENTS OF SOCIALISM 

servant and the retainer are producers of utilities for indi- 
viduals or groups of individuals, but they are not producers 
of social wealth. Every such servant or retainer means one 
more laborer taken from social production, and so much 
more work to be done by the producers who are left. 

The social effect of luxury: It is a common fallacy that 
anything which "makes work" is advantageous to labor. 
When some millionaire indulges in a particularly wild ex- 
travagance it is not unusual to hear it said that he is per- 
forming a social service by "putting money into circula- 
tion." It might as well be said that a vandal who amused 
himself by smashing windows was a social benefactor because 
he caused people to spend more money and made work for 
glass-blowers and glaziers, as that any good results from 
useless expenditures in any other form. Every plate-glass 
window has been produced by an expenditure of human 
effort and its unnecessary destruction means so much social 
loss. The labor of society consists of the replacement of 
goods which have been used up or destroyed, and devising 
new kinds of goods which will add to human efficiency and 
happiness. Waste and luxury from a social point of view 
mean a squandering of the products of labor, and a diverting 
of productive energy to useless ends. 

The fallacy that labor spent upon the production of luxuries 
which are an exclusive class privilege somehow benefits the 
laboring class arises from the confusion of wealth with money. 
Real wealth consists of production and consumption of goods. 
Of the total estimated wealth of the United States, gold, 
the only standard money, constitutes little more than one 
per cent. Its value depends upon its exchangeability for 
other things. The real social effect of excessive luxury is 
the destruction of social wealth in the accumulated products 
of labor power. If a man with an income of a million dollars 
a year should live according to the standard of an Italian 
laborer, his income would be quite as freely circulated as 
though he spent it all on steam yachts, palatial dwellings 
or jewels for courtesans. This money, whether invested 
or deposited in banks, would be in constant circulation. 

Degeneracy as the result of great wealth : It has been well 
said that society rots at both extremes; the rich rot from 
luxury and the poor rot from poverty. Great wealth is not 



LEISURE AND LUXURY 51 

an unmixed blessing. Idleness and lack of social respon- 
sibility combined with the gratification of every whim, lead 
to dissipation, self-indulgence and other evils which result 
in the demoralization of the individual. A parasitic existence, 
whether in the plant or the animal kingdom, or in human 
society, brings about changes in the organism which unfit 
it for any further independent existence. It used to be said 
that a family passed from shirt sleeves to shirt sleeves in 
three generations, and perhaps the saying was to a certain 
extent true when the country was new and men stood more 
nearly upon their own merits. But at present, when fortunes 
are so immense, it takes little ability to keep them together, 
and the degenerate who otherwise would be earning the 
minimum wages at unskilled labor, or be in the care of some 
institution, is enabled to give monkey dinners and waste 
wealth in other equally foolish ways, and even then is unable 
to materially reduce the capital which he has inherited. 

A few such individuals might be kept in custodial institu- 
tions, but it is obvious that only a very small number of 
the most flagrant cases could be thus dealt with. The only 
remedy for the degeneracy which is commonly associated 
with the inheritance of immense wealth is to stop producing 
degenerates of this type. This can be done by abolishing 
the conditions which permit an idle class to live in luxury 
while the producing class languishes in poverty. 



52 ELEMENTS OF SOCIALISM 



SUMMARY 

1. The function of the capitalist as such needs to be distinguished 
carefully from that of the director of industry, who in that capacity 
is a producer. 

> 2. The inheritance of capital perpetuates class distinctions and gives 
rise to a group of capitalists who have no directive functions. 

3. Leisure is necessary for the development and continuation of 
civilization and culture. Before the time of machine production 
leisure was possible only to a few. Now it could become possible for all. 

4. Servants and retainers of the rich are socially unproductive work- 
ers, and a burden on society. 

5. Luxury involves social loss, and the diversion of labor from occupa- 
tions which are socially productive. 



QUESTIONS 

1. Explain the attitude of the Socialist toward the " Captain of 
Industry." 

2. Why distinguish between the inheritance of capital and the inher- 
itance of such personal property as jewelry and paintings? 

3. If a leisure class was socially advantageous in the Middle Ages, 
why is it not so now? 

4. Discuss the social effect of frequent changes in fashion. 

5. Make a list of occupations which would be regarded by Socialists 
as socially unproductive. 

6. What is the fallacy in the expression, u Spending money makes 
trade good"? 

7. How may great wealth bring about degeneracy? 



Literature 

Ely, R. T., and Wicker, G. R., Elementary Principles of Economics, 
Ch. IV. 

George, Henry, The Menace of Privilege. 

Veblen, Thorstein, The Theory of the Leisure Class. 



CHAPTER VI 

INDIVIDUAL AND SOCIAL RESPONSIBILITY 

Socialism and Individualism: It is a very common error 
to regard Socialism and Individualism as antithetical con- 
cepts. As a matter of fact, there is no antagonism between 
the two. The Socialist contends that true individualism 
is impossible under capitalism and that fact constitutes no 
small part of his indictment of the existing social order. 

Individualism is not an absolute but a relative term. 
There has never been a time when any individual could live 
his life within the boundaries of human society absolutely 
untrammeled by the lives of others or their requirements. 
The most despotic monarch has always been bound in some 
degree by convention, influenced by advice, restrained by 
fear of revolt or coerced by circumstance. Even when 
exceptional liberties of individual activity are enjoyed by 
favored individuals or classes they are never absolute and 
unlimited. Absolute individual freedom is hardly conceiv- 
able, even as an abstract conception. It is very evident that 
by its very nature society places upon the liberty of every 
individual some limitation, some restraint. It is equally 
evident that when excessive individual liberty is granted to 
an individual or a class, enabling that individual or class 
to oppress other individuals or other classes, true individual- 
ism does not exist. Neitzsche's Superman is often referred 
to as the perfect apotheosis of individualism, but that view 
is not warranted, for the reason that he could only exist 
by crushing the individuality of others. True individualism 
is inseparable from equality of opportunity. The freedom 
and opportunities of each individual must be bounded by 
the equal freedom and opportunities of every other indi- 
vidual. 

Capitalism and Individualism: Under a system which is 
properly described as wage-slavery the workers have little 

53 



54 ELEMENTS OF SOCIALISM 

freedom or opportunity for individual development. Their 
lives are forced into narrow grooves, individual initiative is 
discouraged, and they have no time for creative effort out- 
side of their working hours, even if they should feel the need 
of it. Leisure is a necessary condition for creative effort, 
and that is an unknown luxury to most wage-earners. Life 
is reduced to a dull level of deadly monotony, a joyless round 
of work at daily tasks which are heavy, irksome and unin- 
spiring, mitigated by cheap recreation, often brutalizing in 
its effects, by eating and sleeping. Relatively few members 
of this class ever reach distinction. The great majority of 
the distinguished men and women of one generation are the 
sons and daughters of the moderately wealthy and comfort- 
able middle classes of the generation before. When a mem- 
ber of the wage-earning class does rise to a place of distinc- 
tion it is a fact considered worthy of special comment and 
we get the impression that the number of such successes is 
greater than it really is. Even the leaders of the workingmen 
in their struggles frequently come from the classes above. 

While the rich enjoy many more opportunities for the 
development of individuality than do the wage-earners, as 
a class their lives are not characterized by a gain of individ- 
uality commensurate with their privileges. The rich society 
woman who is enslaved by the customs and conventions of 
the world in which she lives, and exhausted by the aimless 
round of social duties and vulgar dissipation which com- 
prise such a large part of her parasitic existence, is as much 
enslaved by her wealth as the poor seamstress is by her 
poverty. Her life becomes just as monotonous and irksome, 
and equally prevents the development of individuality. 
Such a woman has often as little time and energy left for 
creative work and self-expression as her poorer sister. Even 
the active capitalist, the typical captain of industry, is not 
free from the narrow bondage of wealth. We speak of such 
a man as owning so many millions of dollars, but it would 
be nearer the truth to say that the millions of dollars own 
him. Absorbed in the task of getting wealth, the task be- 
comes an obsession. Money ceases to be a means, it becomes 
an end: it is no longer servant, but master. Life becomes a 
narrow and sordid existence from which it is impossible to 
break. When he retires in old age he is unhappy because 



INDIVIDUAL AND SOCIAL RESPONSIBILITY 55 

he finds too late that he has lost the capacity for rational 
enjoyment. 

Perhaps the greatest opportunities for individual develop- 
ment and expression are enjoyed by the most prosperous 
and independent section of the middle class. The person 
whose income is secure and large enough to permit the leisure 
and the comfort essential to a high order of creative work, 
and is not burdened with the anxiety involved in the owner- 
ship of millions, is more to be envied than any other member 
of society. A large proportion of the artists, scientists, 
inventors, statesmen, philosophers and writers have come 
from this section of the middle class. It is only too true that 
a vast number of those who enjoy these advantages do not 
profit by them. The corrupting influence of the example of 
the idle rich is a factor which must be reckoned with. It 
is no wonder that the lives of so many who might profit 
by their available opportunities become mere shoddy imita- 
tions of the lives of the richer class above them, lives of 
vain attempt to appear to be something which they are not. 

To sum up: for the great mass of the people the condi- 
tions of capitalist society make a worthy individualism 
impossible. It will not be possible until parasitic idleness 
and brutalizing overwork have both been abolished. The 
goal to be aimed at is the realization of Mr. Ruskin's fine 
saying that "Life without industry is guilt; labor without 
art is brutality." Not until all men are usefully employed 
at work which is worth the doing and of itself a pleasure, 
and the work is done under conditions which are healthful, 
and rewarded with the leisure and the material goods 
necessary to the fulfillment of every legitimate craving for 
knowledge, for beauty and self-expression will true individ- 
ualism be possible. 

Class education: Where social classes exist it seems 
inevitable that the educational system as a whole should 
tend to perpetuate the class division. Consciously or uncon- 
sciously, the private school sharpens class distinctions and 
fixes an almost impassable barrier between the rich and the 
wage-earning classes. The public school, left to the children 
of the relatively poor, makes other social contacts impossible. 
These differences maintained throughout the formative years 
of life form habits of thought which can hardly be broken. 



56 ELEMENTS OF SOCIALISM 

Thus the individuality of the rich child and the individuality 
of the poor child are merged with the spirit of their respective 
classes. Their sympathies are narrowed and they are 
rendered almost incapable of entertaining feelings of true 
social unity and democracy. 

11 Benevolent feudalism" : When a member of the capitalist 
class comes to a realization of the effects of poverty, and 
honestly wishes to improve social conditions, it does not 
occur to him, as a rule, to consult the wishes of the people 
he would help. His attitude is substantially that of the 
paternal feudal lord who considered it his duty to care for 
his villein tenants. To alter the conditions of life by paying 
higher wages is usually beyond his individual power, and he 
is not likely to do so in any case. He is willing to give to 
the workers out of the wealth which he receives many of 
the things which he thinks they ought to have. He is not 
even willing to give them money outright as private largess, 
because he fears that they would not spend it wisely. 

We find, then, as a striking phenomenon of the capitalist 
system, "philanthropy" in all Hs forms. The conspicuous 
gifts of libraries and universities are familiar to everyone, 
but it is the so-called "welfare work" which touches the 
working class most directly. The building of model tene- 
ments, the establishment of clubs and lunch rooms, sick 
benefit funds and the Christmas turkey all supply the bene- 
ficiaries with things desirable in themselves, but it is ques- 
tionable whether the consequent loss of independence and 
self-reliance does not outweigh any possible benefit received. 
The danger is all the greater when, as is usually the case, 
the gift is made in such a manner as to increase the power of 
the giver over the lives of the work-people. This feudal 
assumption of personal responsibility for the social life of 
others effectually destroys all feeling of collective responsi- 
bility, and makes the worker a slave in his social as well as 
his economic relations. It is not surprising that the working- 
man should resent this social dictation, nor that he should 
be charged with base ingratitude toward his generous bene- 
factor. Neither side is capable of understanding the motives 
and feelings of the other. The matter may perhaps be put 
in a clearer light by instancing the case of the benevolent 
capitalist who logically carried his welfare plans a step 



INDIVIDUAL AND SOCIAL RESPONSIBILITY 57 

higher in the social scale and announced that he would 
furnish saddle horses for the free use of all his employees 
who were receiving salaries of $2,000 or over. He was much 
chagrined when the employees informed him that they would 
much prefer an increase of salary. 

Social responsibility: While there is little direct respon- 
sibility to be attached to any individual in the present social 
order, and while it is not desirable for any individual to 
assume such responsibility, we must recognize a collective 
responsibility, in which we share as individuals, for the 
existence and perpetuation of evil and unjust conditions. 
Responsibility can only be attached to a man in his capacity 
as a member of society. His will and individuality can only 
be effectively expressed through the social organization, and 
a form of society which is composed of antagonistic classes 
is a very imperfect medium for the expression of whatever 
sense he has of personally sharing in the collective respon- 
sibility. 

Perhaps the greatest social advantage which results from 
the class consciousness of the workers, and the organization 
based upon it, lies in the fact that they offer the most serv- 
iceable medium for the expression of this sense of personal 
participation in the collective responsibility for evil and 
unjust conditions. The working class is so numerous that 
its organization offers to the individual, even though he 
does not belong to the working class, the most effective 
medium through which to express his sense of being a sharer 
in the collective responsibility for the ills of society, and 
the most efficient method of contributing to their removal. 
Class ethics may not be the highest ethics imaginable, but 
the ethics of the class in revolt, which is organized to abolish 
classes and class rule, is the highest attainable here and now, 
and, therefore, the most efficient ethics. When the means 
of production and exchange have been made subject to 
social ownership and control, their advantages socialized 
and classes abolished, the machinery of the class-less State 
will make possible the perfect expression of the individual's 
sense of sharing every social responsibility. 



58 ELEMENTS OF SOCIALISM 



SUMMARY 

1. Socialism and individualism are not antithetical concepts. Indi- 
viduality can only be expressed through the medium of social organiza- 
tion. 

2. Under capitalism there is little opportunity for the development 
of individuality either among the poor or among the rich. 

3. Class education forms habits of thought which restrict individual- 
ity and the power of self-expression. 

4. The conscious organization of the working class offers the best 
medium for personal participation in the collective social responsibility. 



QUESTIONS 

1. What limitations upon individual activity must be imposed by any 
social group? 

2. What is the effect of inequality in social position upon indi- 
viduality? 

3. How does capitalist society restrict the freedom of the working- 
man? That of the capitalist? 

4. Discuss the social effect of philanthropy. 

5. What are the conditions of effective social responsibility? 



Literature 
Ghent, W. J., Our Benevolent Feudalism. Mass and Class. 



PAET II 

SOCIALIST THEORY 



CHAPTER VII 

INTRODUCTORY 

The influence of Karl Marx: As we turn from the Social- 
ist criticism of existing society to the more positive aspects 
of Socialism we encounter the personality of the greatest 
thinker and most powerful influence in the history of Social- 
ism, Karl Marx. Professor Thorstein Veblen has said: "The 
Socialism that inspires hopes and fears in the world to-day 
is of the school of Marx. No one is seriously apprehensive 
of any other so-called socialistic movement, and no one is 
seriously concerned to criticise or refute the doctrines set 
forth by any other school of 'Socialists.' The Socialists of 
all countries gravitate toward the theoretical position of 
avowed Marxism. In proportion as the movement in any 
given country grows in mass, maturity and conscious pur- 
pose, it unavoidably takes on a more consistently Marxian 
complexion." 1 

The greatness of Karl Marx is freely admitted by the most 
implacable opponents of Socialism as well as by its most 
ardent advocates. The words "Socialism" and "Marxism" 
are practically synonymous in the vast literature of the 
subject which has been produced during the last thirty or 
forty years. Whatever modifications his followers may have 
made in his theories, or may yet be compelled to make, one 
fact stands undisputed by friend or foe, namely, that the 
great international Socialist movement finds in those theories 
its justification, its intellectual weapons for defense and 
attack, the rationale of its aspirations toward a better and 
happier state of society and the bedrock of its assurance in 
the ultimate attainment of that goal. 

Saint-Simon, Fourier and Owen: It is commonly said 
that Marx found Socialism a Utopian movement and trans- 
formed it into a scientific movement. Prior to Marx Social- 

1 Quarterly Journal of Economics, XXI, p. 299 

61 



62 ELEMENTS OF SOCIALISM 

ism was the name given to a variety of communistic schemes 
devised and advocated by men who regarded themselves as 
the discoverers of the true remedy for all social ills. For our 
present purpose it will be sufficient if we regard the Utopian 
method as represented by the three great Utopians of the 
early part of the nineteenth century, Saint-Simon and Fourier 
in France and Robert Owen in England. 

These names are of special significance to us in this study. 
It was the Saint-Simonian form of Socialism which first 
awakened the interest of Marx; it was here in the United 
States that the principal Fourierist experiments were made, 
enlisting so many of the most brilliant minds of the latter 
part of the first half of the nineteenth century; it was to 
the schemes of Robert Owen that the word "Socialism" was 
first applied, in 1833, and Owen also made his most ambitious 
experiment in the United States, at New Harmony. 

But there is another and weightier reason for the grouping 
together of the three names. It enables us to avail ourselves 
of the masterly description of Utopian Socialism by Frederick 
Engels, perhaps the most lucid brief statement of the matter 
ever written. He first describes how the French philosophers 
of the eighteenth century, the forerunners of the Revolution, 
proclaimed the "Kingdom of Reason" and refused to recog- 
nize any authority other than that of reason in religion, 
ethics, natural science, politics, or anything else. By reason 
they judged society and all its institutions. They condemned 
society as a whole and every existing social institution as 
irrational. What was needed was a Kingdom of Reason, 
the rule of Eternal Truth. Engels then proceeds to show 
that the Utopian Socialists, while holding a very different 
objective ideal from that of the eighteenth century phil- 
osophers, shared their philosophy. 

"One thing is common to all three. Not one of them ap- 
pears as a representative of the interests of the proletariat, 
which historical development had, in the meantime, produced. 
Like the French philosophers, they do not claim to eman- 
cipate a particular class to begin with, but all humanity 
at once. Like them, they wish to bring in the kingdom of 
reason and eternal justice, but this kingdom, as they see it, 
is as far as heaven from earth from that of the French 
philosophers. 



INTRODUCTORY 63 

"For, to our three social reformers, the bourgeois world, 
based upon the principles of these philosophers, is quite as 
irrational and unjust, and, therefore, finds its way to the 
dust-hole quite as readily as feudalism and all the earlier 
stages of society. If pure reason and justice have not, 
hitherto, ruled the world, this has been the case only because 
men have not rightly understood them. What was wanted 
was the individual man of genius, who has now arisen and 
who understands the truth. That he has now arisen, that 
the truth has now been clearly understood, is not an inev- 
itable event, following of necessity in the chain of historical 
development, but a mere happy accident. He might just 
as well have been born 500 years earlier, and might then 
have spared humanity 500 years of error, strife, and suf- 
fering." 

With such a basis it was inevitable that Utopian Social- 
ism should take the form of moral judgments, denunciations 
of the wickedness and selfishness of the rich and powerful 
on its critical side, and of colonizing schemes on its positive 
side. Fourier waited one hour at noon every day for twelve 
years for the coming of a philanthropist with the gift of a 
million francs, with which the happiness of the human race 
would be secured. The pathetic picture illustrates the 
essential feature of Utopian Socialism — the perfect plan 
had been devised; only the money was lacking. Once 
adopted, the plan would end poverty, misery and all other 
social evils. 

The Marxian synthesis: Marx began his career as a 
Socialist by assailing the ideological basis of Utopian Social- 
ism. More than a decade before the publication of the 
epoch-marking discoveries of Charles Darwin and Alfred 
Russell Wallace, and long before Herbert Spencer, then a 
young man in his twenties, had been heard of, he was apply- 
ing the theory of evolution to society, and assailing the very 
foundations of Utopianism. 

With the publication of the Communist Manifesto, in 1848, 
arose a new school of Socialism which laughed all the fanciful 
schemes of communistic colonization to scorn and based its 
whole argument for and faith in a better society upon the 
broad fact of evolution. The Darwinian theories greatly 
aided the development of this new school by establishing 



64 ELEMENTS OF SOCIALISM 

the fact of evolution, and it was at once natural and proper 
that the new school of Socialism should claim to be scientific. 
Marxian Socialism is therefore internationally known as 
scientific Socialism in contradistinction to Utopian Socialism. 
The philosophical basis of Marxian Socialism consists 
of a synthesis of three distinct but correlated theories. The 
first, which Marx called the materialistic conception of 
history, explains the motive force in social evolution, its 
causation; the second, the class struggle theory, explains 
the mode of social evolution as distinguished from its causa- 
tion; the third, the theory of surplus-value, explains the 
basis and origin of the class antagonisms in present society, 
and the development of society in the direction of Socialism. 
It is with this philosophical synthesis we are concerned at 
this stage of our study. 



SUMMARY 

1. The theory of modern Socialism is inseparable from the construc- 
tive thought of Karl Marx. 

2. The theory of modern Socialism does not admit of arbitrarily 
constructed Utopian ideals. 

3. The philosophical basis of Marxian Socialism is a synthesis of the 
theories of the economic interpretation of history, of the class-struggle 
and of surplus-value. 



QUESTIONS 

1. Discuss the position o* Marx in Socialist thought. 

2. What was the earliest meaning of the word Socialism? 

3. What is the essential difference between Utopian and Marxian 
Socialism? 



CHAPTER VIII 

SOCIAL EVOLUTION 

Socialism and the principle of evolution: The principles 
of scientific Socialism are almost meaningless without a 
comprehension of the evolutionary character of life and of 
society. Scientific Socialism studies the evolutionary changes 
that have taken place in society from the simplest human 
groups in primitive savagery to the complex world society 
of to-day. It investigates the causes of the changes which 
have taken place, and the causes which are operating in 
the world at present. It recognizes that the evolutionary 
process is not yet complete, and points out the next step 
in social evolution, which Socialists believe will be to a world 
society based upon cooperative production, and cooperative 
use of natural wealth, for the benefit of all, as contrasted 
with the present stage of development, in which wealth 
is produced and used largely for the benefit of a few. 

The evolution of social groups is recognized by non- 
Socialists, but they generally confine themselves to a descrip- 
tion of past conditions, without applying the results of their 
observation in the formulation of social theories, or in the 
forecasting of the future course of development. 

Evolution and revolution: Darwin and his immediate 
followers believed that evolution was the result of infini- 
tesimal variations in existing forms, which gradually 
accumulated when they proved of advantage to the indi- 
vidual, and in time resulted in new species. The development 
of new forms of life would therefore be a process so slow as 
to be imperceptible except by the comparison of two periods 
separated by thousands of generations of individuals. A 
more recent school of biology believes that changes come 
more suddenly. New environmental conditions cause many 
members of a species to depart greatly from the type, so 
that in one generation there are individuals so different from 

65 



66 ELEMENTS OF SOCIALISM 

their parents that they may be classed as a new variety. 
Some of these individuals, if bred to others of like character, 
will breed true without reversion to the older type. This 
is the theory of evolution by mutations of which Hugo 
DeVries is the greatest exponent. According to this theory, 
the development of new species, instead of depending upon 
an incalculably slow process of modification, frequently 
results from relatively sudden changes. In other words, 
there are sudden leaps or "mutations" in the process of 
evolution. This theory has been of great interest to Socialists 
because by analogy it appears to support the view that social 
transformation may be relatively sudden, and not conditioned 
by a slow process of almost imperceptible change. 

However conflicting these views may seem to be, they are 
in fact not conflicting but complementary. Just as Darwin 
himself "recognized both lines of evolution," that variations 
might arise suddenly, as De Vries claims, or gradually and 
almost imperceptibly, so the best thoughts of the modern 
Socialist movement reconcile both views of social evolu- 
tion. Revolution is not the opposite of evolution. As nature 
accomplishes changes by slow and gradual processes, by 
erosion and climatic cycles covering hundreds of thousands 
of years, so also it works by sudden changes, earthquakes, 
volcanic eruptions, and the crashing together of worlds in 
space. 

Socialism, then, recognizes the existence of both gradual 
and relatively sudden changes in social organization. When- 
ever forces, physical or social, meet with but slight resistance, 
the changes they effect are slow and gradual. But when 
forces are checked by the inertia of the mass on which they 
work, or by the opposition of other forces, an accumulation 
of energy results, and when a crisis comes the change is 
sudden and often catastrophic. 

Animal and human societies: Professor Giddings defines 
sociology as the "science of the natural groupings and 
collective behavior of living things, including human beings." 
The lower animals, and even plants, live in groups and have 
a form of social organization. Among ants and bees this 
organization is very complex and involves division of labor 
and indirect processes to a high degree. Evolution was not 
always the result of struggle and the survival of the strongest 



SOCIAL EVOLUTION 67 

and most cunning, but mutual aid, companionship and 
cooperation played a large part in the processes of develop- 
ment. 

Family life begins far back of human society. The 
organization of groups for offense and defense and for the 
gathering of food are so common among animals that exam- 
ples need not be cited. They will occur to everyone. All 
these forms of cooperation had their effect on variation and 
survival, and it was not always the strongest or best adapted 
individuals who survived, but the forms best equipped with 
a social nature. When man first appeared he was already 
equipped with a social heredity of association and coopera- 
tion which enabled him, in spite of his naturally defenseless 
condition, to hold his own in the struggle with other animals. 

No existing human society is so low in the scale of evolu- 
tion as was that of primitive man, but the evidence is 
conclusive that man was always a "social animal," probably 
evolving in the form of social groups through the slow stages 
from anthropoid to man, so that even if we could observe 
in retrospect the complete process, it would be impossible 
to fix within a hundred thousand years the time of the 
appearance of a group form w T hich was distinctly human. 
But although social evolution had its beginnings far back 
of the human race, for our present purpose the study of 
human societies is sufficient. 

The social mind: "The mental and moral elements of 
society are combined in products that are called by such 
terms as the common feeling, the general desire, the moral 
sense, the public opinion, and the general will of the com- 
munity, which it is convenient for the sociologist to name 
collectively the social mind." 1 

With the development of man and his differentiation into 
races, society became more and more complex, and in the 
place of the instinctive habits of lower animals there devel- 
oped the social mind. The basic ideas which form the content* 
of the social mind are economic. Individual experiences 
of utility, such as the discovery of the food value of a plant, 
are developed and communicated by means of association 
and become the common property of the group. Where 
useful things were limited in quantity and the supply was 

1 Franklin H. Giddings, Principles of Sociology, p. 132. 



68 ELEMENTS OF SOCIALISM 

not equal to the demand the ideas of wealth and value must 
have entered the primitive social mind. Private property 
was probably somewhat later in origin. 

The necessity of protecting the sources of food supply 
gave rise to the recognition within the group of a common 
territory, and the exclusion of other groups from these 
hunting or fishing grounds. Warfare developed leaders 
and allegiance, and welded the group into a political organ- 
ization of a primitive type. 

Primitive man began to think and to talk about himself and 
his environment. The world seemed full of mystery. How 
could he hunt in a dream when his friends swore that he 
had not moved? The echo and the shadow puzzled him. 
The mighty forces of nature awed him. There must be a 
power greater than himself, and since he could not think 
of forces as impersonal, he imputed personality to that 
power. There must be a spirit apart from the body or he 
could not hunt in his dreams. Thus were evolved the ideas 
of anthropomorphic gods, spirits and ghosts. His friends 
slept and afterwards reported dream adventures, so his 
friends dead had gone away to the "happy hunting grounds" 
to stay. Thus at a stage earlier than any now represented 
by even the lowest modern savages, the social mind contained 
ideas economic, political and religious, ideas which effectu- 
ally differentiated him from his ancestors. 

The family: There is no unanimity of opinion among 
sociologists as to the form of the primitive family. Prac- 
tically all forms of the family known among men are to be 
found also among lower animals. The simplest theory, and 
one which has never been disproven, is that primitive man 
lived in a state of practical promiscuity with no form of 
marriage. It is true that nearly all if not all of the peoples 
now in existence have some form of marriage, but the tie 
is often only temporary. There is evidence that every race 
has passed through a social stage in which the only relation- 
ships were those traced through the mother, the obvious 
reasons being either the failure to recognize the part of the 
father in the child or the difficulty of determining its pater- 
nity. It is doubtful if for one-tenth of the life of mankind 
paternal relationships have been anywhere recognized. 

The most primitive races now living have very elaborate 



SOCIAL EVOLUTION 69 

systems of kinship through the mother, and these systems 
are remarkably similar between groups in a similar stage of 
development, no matter in what part of the world they 
may live. The American Indian, the Australian Bushman 
and the primitive European all had the same complex 
maternal family organization. 

Perhaps through the conquest of another people and the 
appropriation of its women, the relation of father to child 
began to be looked upon as important, and finally modified 
the mother family to the extent that maternal relationships 
were often disregarded. It is only in very recent times and 
in a relatively high civilization that a monogamous family 
becomes the rule and relationship is traced both through the 
father and through the mother. A stable monogamous 
family is a high ideal which is yet far from being fully 
realized. 

The clan : As the children of a common mother recognized 
their bond of kinship from the beginnings of human society, 
it was natural to continue the bond from generation to 
generation and so form the clan or gens. Under this system 
all descendants through female lines of a common female 
ancestor, often so remote as to be mythical, were counted 
as kin, thus forming the social organization next broader 
than the simple family. It is as though under our system 
the children all took the name of the mother instead of that 
of the father from generation to generation, and all persons 
having the same surname were considered as kin and bound 
to aid and assist one another in every way possible. A son 
then belonged to the clan of his mother, but his children 
belonged to the clan of their mother, and were not recognized 
by their paternal relatives and were under no obligations to 
them. 

When the transition came from the mother family to the 
father family, the clan also changed its nature and maternal 
relationships were disregarded. This form can be more easily 
understood, for it is the familiar system of Scotland and 
Ireland, where such clans as the McDougalls and the O'Neills 
have maintained their organization almost to the present 
day. 

For the purposes of common religious ceremonies from 
two to five clans sometimes combined into a phratry. The 



70 ELEMENTS OF SOCIALISM 

origin of the phratry was probably the subdivision of a 
single clan, the various divisions retaining memories, and, 
later, traditions, of their former unity. 

The tribe and the confederacy: The ancient clan was too 
weak in numbers to engage in war or to inspire respect in 
the minds of possible enemies, so a number of clans were 
united into a tribe. The tribe was organized under the 
leadership of its elders and its own war chiefs and occupied 
a fairly definite territory when not migrating from one sec- 
tion to another. 

The more advanced peoples were still further organized 
into tribal confederacies, such as the league of the twelve 
tribes of Israel and that of the Iroquois. These confed- 
eracies were the highest forms of political organization 
attained in savage or barbarous society and sometimes 
attained to the proportions of powerful states. 

Probably the best example of tribal organization based 
upon kinship is that of the Iroquois as described by Lewis 
H. Morgan. About the time of the first Dutch Settlement, 
five Indian tribes, occupying a territory now included in 
the State of New York, formed a league or confederacy. 
In 1715 a sixth tribe, the Tuscaroras, was admitted, but not 
to full equality. s( 

Primitive communism: In tribal society there was no 
conception of private property other than that directly 
associated with the person. Much of the trouble between 
the whites and the Indians of America has been due to the 
failure of the Indian to comprehend our idea of private 
property in land. In tribal communism any object not 
in use is looked upon as common property. The spoils of 
the chase are always impartially divided, and the hoarding 
of food or other useful things is not tolerated. Even dwell- 
ings are rarely private. Among the Iroquois the members of 
the same clan living in the same village occupy one com- 
munal dwelling. Even the lazy are in no danger of starva- 
tion. They are welcome to share in the food provided in 
any lodge, but they are obliged to suffer scorn and abuse 
from their hosts, especially from the women. 

The ideas of primitive communism are hard to eradicate. 
They survive in the universal hospitality of all simple folk 
the world over. The Russian moujik cannot be reconciled to 



SOCIAL EVOLUTION 71 

the division of the communal lands of the mir. The "thieving 
propensities" of the Southern negro do not come from a 
criminal nature, but from the failure of a simple barbarous 
people fully to appreciate the conception of private property. 

Private property: In order that anything may become 
private property it must not only be appropriated by an 
individual, but society must acknowledge his right of 
possession. The only forms of individual property so sanc- 
tioned by society under tribal communism were weapons, 
personal ornaments, and trophies of the chase or of war. 
As society became more complex, the elders of tribes and 
war-chiefs were permitted to appropriate more than a pro- 
portional share of the booty of a successful raid. When war 
captives began to be kept alive as slaves instead of being 
killed, the custom arose of considering them as the private 
property of the chief. It is only under civilization that 
private property in land appears. Land ownership by 
groups and families leans naturally to ownership by indi- 
viduals. Private property in the social means of production 
aside from land is almost entirely the product of capitalist 
society. Never before, except in agricultural and great 
building operations, were armies of men employed in pro- 
ducing for individual owners of the means of production. 

From savagery to barbarism: Morgan 1 divides the proc- 
ess of social evolution into three main epochs — savagery, 
barbarism and civilization. Savagery and barbarism in 
turn may be divided into three main stages — lower, middle 
and upper. As in the case of all forms of evolution, progress 
is slowest in the earlier stages, and it has been estimated 
that nine-tenths of the life of the human race has been spent 
in the epoch of savagery and about one-hundredth only in 
the epoch of civilization. 

The first stage of savagery alone probably lasted longer 
than all subsequent stages of human evolution combined, 
so that while the progress made by mankind in this stage 
was very slow, the absolute gain was very great. No race 
of to-day is .so low as the first stage of savagery in which 
mankind still lived in the tropical forest, probably in trees, 
and subsisted on fruits, nuts and roots, and probably raw 
meat and fish. During this period man first developed 

l Ancient Society , by Lewis H. Morgan, p. 9 et seq. 



72 ELEMENTS OF SOCIALISM 

articulate speech and learned to use clubs and stones for 
defense and attack. 

With the discovery and control of fire begins the middle 
state of savagery. Coincident with this great advance 
comes the use of rough chipped stone implements. Dis- 
covery and invention thus enabled the savage to enlarge 
his menu and to make his food more palatable by cooking. 
The lowest tribes of to-day are living in the middle stage of 
savagery. 

The higher stage of savagery is marked by the use of the 
bow and arrow, wooden vessels and utensils and polished 
stone implements. Many Asiatic and African tribes are 
still in this higher stage of savagery as were our own North 
Western Indians until comparatively recent times. 

From barbarism to civilization: The transition to bar- 
barism was marked by the invention of pottery, which was 
probably first made by covering wooden or wicker vessels 
with clay and burning out the wood. In this stage animals 
were domesticated and agriculture began. Most of the 
North American Indians were in the lower stage of barbar- 
ism at the time of the settlement of the country by Euro- 
peans, and not savages as is generally supposed. 

In the middle stage of barbarism, represented by the 
Indians of Mexico and Peru, agriculture was further devel- 
oped and dwellings were built of stone and sun-dried brick. 
The softer metals were known and used. In the East the 
middle stage of barbarism is represented by such nomadic 
groups as those of Abraham and Jacob before the Egyptian 
captivity. 

The higher stage of barbarism begins with the smelting 
of iron. It is the age of mythology and epic poetry, the age 
of the Homeric poems and the Norse Sagas. 

These stages have differed in different parts of the world 
only in so far as the natural environment has differed. In 
regions where metals were rare the development of metal 
working was slower than that of agriculture and pottery. 
By reason of their invention of a primitive calendar and their 
near approach to a written language, the Mayas of Yucatan 
might perhaps be classed as barbarians of the higher class, 
or even as approaching civilization, although they had not 
learned to smelt iron. 



SOCIAL EVOLUTION 73 

It is only with the development of a written language, as 
distinguished from primitive picture writing, the destruc- 
tion of social organizations based upon kinship, the wider 
utilization of natural and manufactured products, and the 
beginnings of science that we have civilization. The first 
known civilizations originated in Egypt and Babylonia 
about the year 4000 b. c. These early civilizations were 
but beginnings and were participated in by only a small 
part of the people in the countries in which they arose. 

Ancient civilization: The elements of culture developed 
in the valleys of the Nile and the Tigris-Euphrates were 
appropriated successively by the other peoples of South- 
western Asia and the Mediterranean basin, and received 
new additions through the varied experiences of the different 
peoples, until the new civilization culminated in the mag- 
nificent literature, art-, architecture and philosophy of the 
Age of Pericles in Greece. But ancient civilization was never 
the possession of the many. Culture, refinement, art and 
literature are impossible without leisure and freedom from 
drudgery. Ancient civilization was built on slavery. Athens, 
so far as its 20,000 citizens were concerned, was nearer the 
Socialist ideal than any equally large community before or 
since, but the slaves, who probably numbered nearly 200,000, 
were entirely outside the Athenian civilization, and were 
simply the labor-saving machines which made that civiliza- 
tion with its culture possible. The complete separation of 
culture and civilization from production ultimately led to 
the degeneration of the leisure class, which, enervated by 
luxury and dissipation, could not retain its power. The 
development of philosophy was checked by a wave of oriental 
mysticism. Rome then became the leader of civilization, 
but the conditions of its environment led to conquest and 
empire with the consequent development of law and admin- 
istration, rather than literature and art. Then came the 
infiltration and, finally, the invasion of the empire by the 
barbarian North, and the slow process of the absorption and 
democratization of ancient civilization by the whole popula- 
tion of Europe, a process in which the medieval church 
played a prominent part. 

Modern civilization: From one point of view, the Middle 
Ages seem no more advanced than the first stages of civiliza- 



74 ELEMENTS OF SOCIALISM 

tion in Egypt. As in Egypt, almost the only scholars were 
priests and monks, and the mass of the people were bar- 
barians. The same course of development and adaptation 
had to be repeated, but on a far larger scale. Little of real 
value was lost, but instead of twenty thousand Athenians, 
there were millions of Europeans to civilize and two thousand 
years were needed to accomplish the task. Modern civiliza- 
tion is in some respects no higher than that of Greece, but 
it is on an infinitely grander scale. Its greatest original 
achievements are its science and its control of the forces of 
nature. As before we must have leisure and freedom from 
drudgery in order to become civilized, but for the first time 
in all the history of man the time has come when machines 
can be made to do the drudgery, and the powers of man 
released, so that he may develop a real civilization which 
all may enjoy, and not merely a favored few. 



SOCIAL EVOLUTION 75 

SUMMARY 

1. Modern Socialism finds its justification in the principles of uni- 
versal evolution, and its hope for the future is based upon its inter- 
pretation of the past. 

2. The earliest human society was based upon kinship and primitive 
communism. From these beginnings Society had slowly evolved into 
the complex world civilization of to-day. 

3. The main stages of social evolution are savagery, barbarism and 
civilization. Civilization begins with the destruction of kinship or- 
ganization and the development of written language. 

4. Ancient civilization was the possession of the few and had its 
economic basis in slave labor. Modern civilization is the possession of 
the many and is based upon machine production. 



QUESTIONS 

1. Why do modern Socialists consider the principle of evolution as 
a necessary part of their theory? 

2. What special significance do Socialists find in the " mutation 
theory" of De Vries? 

3. What is meant by the "social mind"? 

4. Explain the probable origin of the clan or gens. 

5. Give examples illustrating the survival of the spirit of primitive 
communism. 

6. What was the probable origin of private property? 

7. What are the characteristic features of each of the stages of 
savagery? Of barbarism? 

8. What are the essential features of civilized society? 

9. What are the essential differences between ancient and modern 
civilization? 

Literature 

Darwin, Charles, Origin of Species. Descent of Man. 

De Vries, Hugo, Species and Varieties, their Origin by Mutation. 

Engels, F., Origin of the Family, Private Property and the State. 

Giddings, F. H., Principles of Sociology. 

Howard, G. E., History of Matrimonial Institutions. 

Morgan, L. H., Ancient Society. 

Parsons, Elsie Clews, The Family. 

Spencer, Herbert, Principles of Sociology, Vol. I, Part I. 

Westermarck, E., History of Human Marriage. 



CHAPTER IX 

THE ECONOMIC INTERPRETATION OF HISTORY 

The motive forces in social evolution: So far we have 
been outlining roughly the evolution of society from savagery 
to civilization. The next question is "Why have these 
changes taken place?' ' The problem is complex. Man has 
always lived in society and has been obliged to adapt him- 
self to his social environment, and the social group in turn 
has always occupied some part of the earth's surface in a 
physical environment to which it has been obliged to adapt 
itself. The climate, soil, contour of the land, presence or 
absence of water, the flora and fauna have all had their 
influence upon man, and man has also modified his environ- 
ment. 

Many writers have ascribed the changes in social organiza- 
tion to man's own will and to the influence of great leaders. 
But while it is true that men sometimes rise above their 
environment, the "Great Man Theory" minimizes the limita- 
tions of environment, both social and physical. Other 
writers have gone to the opposite extreme and attempted to 
interpret history by the physical environment alone, leaving 
out of consideration the influence which men have been able 
to exert over their own destiny by modifying their environ- 
ment. 

The Socialist theory: Modern scientific Socialism has for 
its philosophical basis the Marxian theory of historical 
development, which many Socialist writers of the present 
day call the Economic Interpretation of History. Marx 
and Engels, who were the first to develop the theory, called 
it the Materialistic Conception of History. The advantages 
of the former term over the latter are, first, that the specific 
term "economic" is more accurately descriptive than the 
term "materialistic, " and, second, that it obviates the mis- 
understandings which arise from the confusion in the popular 

76 



THE ECONOMIC INTERPRETATION OF HISTORY 77 

mind of the word "materialistic" with the doctrines of philo- 
sophical materialism. The essence of the theory is that the 
rate and direction of social evolution are mainly, but not 
exclusively, conditioned by the development of the methods 
of production and exchange. It does not exclude other 
factors, but subordinates them to the economic factor. 

Origin of the theory: While it is true that earlier writers 
laid the foundations of the theory of the economic motiva- 
tion of society, or anticipated it, Karl Marx was the first to 
formulate it and cause it to be recognized as a theory of 
great philosophical importance. This is probably his great- 
est single contribution to the thought of the world. 

The first indications of the theory in any of the writings 
of Marx are to be found in his little known work, Die Heilige 
Familie, which was published in 1845. But it was not until 
the publication of his Contribution to the Critique of Political 
Economy, in 1859, that he attempted to elaborate the theory. 
In the preface to that work Marx wrote: 

I was led by my studies to the conclusion that legal relations as well 
as forms of state could neither be understood by themselves, nor ex- 
plained by the so-called general progress of the human mind, but that 
they are rooted in the material conditions of life, which are summed up 
by Hegel after the fashion of the English and French of the eighteenth 
century under the name " civic society"; the anatomy of that civic 
society is to be found in political economy. The study of the latter 
which I had taken up in Paris, I continued at Brussels whither I immi- 
grated on account of an order issued by Guizot. The general conclusion 
at which I arrived and which, once reached, continued to serve as the 
leading thread in my studies, may be briefly summed up as follows: 
In the social production which men carry on they enter into definite 
relations that are indispensable and independent of their will; these 
relations of production correspond to a definite stage of development 
of their material powers of production. The sum total of these rela- 
tions of production constitutes the economic structure of society — the 
real foundation, on which rise legal and political superstructures and to 
which correspond definite forms of social consciousness. The mode 
of production in material life determines the general character of the 
social, political and spiritual processes of life. It is not the conscious- 
ness of men that determines their existence, but, on the contrary, their 
social existence determines their consciousness. 1 

Marx proceeded to illustrate the value of the theory as a 
method of historical interpretation by sketching in bold and 

1 A Contribution to the Critique of Political Economy, by Karl Marx, 
translated from the second German edition by N. I. Stone, p. 11. 



78 ELEMENTS OF SOCIALISM 

vigorous outline the interrelation of economic methods and 
social and political institutions: 

At a certain stage of their development, the material forces of pro- 
duction in society come in conflict with the existing relations in produc- 
tion, or — what is but a legal expression for the same thing — with the 
property relations within which they had been at work before. From 
forms of development of the forces of production these relations turn 
into their fetters. Then comes the period of social revolution. 
With the change of the economic foundation the entire immense super- 
structure is more or less rapidly transformed. In considering such 
transformations the distinction should always be made between the 
material transformation of the economic conditions of production which 
can be determined with the precision of natural science, and the legal, 
political, religious, aesthetic or philosophic — in short, ideological forms 
in which men become conscious of the conflict and fight it out. Just 
as our opinion of an individual is not based on what he thinks of himself, 
so can we not judge of such a period of transformation by its own 
consciousness; on the contrary, this consciousness must rather be ex- 
plained from the contradictions of material life, from the existing con- 
flict between the material forces of production and the relations of pro- 
duction. No social order ever disappears before all the productive 
forces, for which there is room in it, have been developed; and new 
higher relations of production never appear before the material con- 
ditions of their existence have matured in the womb of the old society. 
Therefore, mankind always takes up only such problems as it can solve: 
since, looking at the matter more closely, we will always find that the 
problem itseli arises only when the material conditions necessary for 
its solution exist or are at least in the process of formation. 1 

Delimitation of the theory: Marx and Engels sometimes, 
in controversies with their critics, over-emphasized the 
influence of the economic factor in social evolution and made 
their statement of the theory too absolute. This Engels 
himself freely admitted toward the close of his life. Thus, 
in 1890 he wrote to a student: "Marx and I are partly 
responsible for the fact that younger men have sometimes 
laid more stress on the economic side than it deserves. In 
meeting the attacks of our opponents, it was necessary 
for us to emphasize the dominant principle denied by them; 
and we did not always have the time, place or opportunity 
to let the other factors which were concerned in the mutual 
action and reaction get their deserts." 2 In another letter 
he says: "According to the materialistic view of history, 

1 Idem t pp. 12-13. 

1 Quoted from the Sozialistische Akademiker, 1895, by Seligman, 
The Economic Interpretation of History } pp. 142-143. 



THE ECONOMIC INTERPRETATION OF HISTORY 79 

the factor which is in last instance decisive in history is the 
production and reproduction of actual life. More than this 
neither Marx nor I have ever asserted. But when any one 
distorts this so as to read that the economic factor is the 
sole element, he converts the statement into a meaningless, 
abstract, absurd phrase. The economic condition is the 
basis, but the various elements of the superstructure — the 
political forms of the class contests, and their results, the 
constitutions — the legal forms, and also all the reflexes of these 
actual contests in the brains of the participants, the political, 
legal, philosophical, theories, the religious views . . . — all 
these exert an influence on the development of the historical 
struggles, and in many instances determine their form." 

From these statements of the theory by its originators it 
will be seen that it is no part of the theory that every phenom- 
enon of social evolution can be explained by economic facts, 
or traced to economic causes. Much of the criticism which 
has been directed against the theory has rested on the 
assumption that it involved a denial of influence to all other 
factors. The economic interpretation of history may be 
defined as the theory that the rate and direction of social 
progress are determined mainly, but not wholly, by the 
economic conditions existing — principally the methods of 
producing wealth and the social relations which these 
involve. 

Economic interpretation and religion: The theory has 
been especially subject to attacks and misrepresentations 
because of its assumed hostility to all forms of religious 
belief. On this point its dogmatically atheistic friends and 
its dogmatically religious enemies have been equally guilty 
of misunderstanding and misstating the subject of dis- 
cussion. Religion is, fundamentally, man's attempt to put 
himself into harmonious relation with, and to discover a 
satisfying interpretation of, the forces of the universe. The 
more incomprehensible those forces, the greater man's need 
of an explanation of them. The Marxian theory does not 
deny that men have been benefited by seeking an inter- 
pretation of the universe, or that the quest for such an 
interpretation is compatible with rational conduct. It does 
not offer any answer to the great questions, Whence? Why? 
Whither? which mankind in all stages of its development has 



80 ELEMENTS OF SOCIALISM 

asked concerning life itself and the universe, the answers to 
which it has made the framework of its religion. Nor does 
it deny that such questions may be answered. The theory 
does not include these questions and, therefore, cannot in 
any sense be regarded as a substitute for religious belief. 

The bearing of the theory upon religion is purely inter- 
pretative. Marx in his work could not ignore such an im- 
portant and universal phenomenon as religion. He saw that 
the religion of a people, like their laws and their politics, 
always bears a marked relation to their mental development 
and their special environment. The savage ascribes person- 
ality to everything which exhibits phenomena which he 
cannot otherwise explain, and thus develops an animistic 
philosophy involving every striking fact in his environment. 
To the Israelites of the formative period Jahve was a tribal 
god, similar to the gods of other tribes about them, but 
fortunately more powerful. With the development of the 
national spirit, Jahve became a King and Supreme Lord 
of the Theocracy. In times of oppression and war Jahve 
was a God of Battles, while under other conditions be became 
a God of Peace. 

In almost every religion, the conception of the future 
life is, in its early stages at least, an idealized reflex of the 
terrestrial life. A hunting tribe believes in a future life in 
which game is plentiful. A people accustomed to disagree- 
able labor and poverty looks forward to a future life of ease 
and luxury. The earthly hierarchy is reproduced in the 
heaven, and a society of caste is included in the concept of 
heaven when it exists below. 

It is not a denial of the truth of any form of religion to 
give a rational explanation of its origin and the forces shaping 
its development. It is not a denial of the doctrines of the 
Roman Catholic Church to explain its form of organization 
and the statement of its creed by the conditions attending 
its origin and development within the Roman Empire, its 
political function as the successor of the Empire in Western 
Europe, and the economic environment of feudalism. 
Neither do we deny the benefits resulting from the Protestant 
revolt by attributing the revolt itself to economic condi- 
tions, rather than to the personality and genius of Martin 
Luther. Students of comparative religion and Biblical 



THE ECONOMIC INTERPRETATION OF HISTORY 81 

criticism find the method of economic interpretation as 
helpful and illuminating as do the students of history and 
politics. 

Economic interpretation and "free will": It has been 
charged that the economic interpretation of history denies 
the freedom of the will and presents a fatalistic view of 
society. This charge arises from a misconception of the 
basis of the theory. It is not a theory of the motives of 
individuals, but an explanation of the actions of social 
groups. We simply say that a social group will adapt itself 
to economic conditions or perish. When the game in a 
certain district is killed off, the primitive inhabitants must 
turn from hunting to fishing, or to a vegetable subsistence. 
Any individual is perfectly "free" to continue his hunting, 
but the chances are that he will starve to death. 

The point may be illustrated by the theories of mass 
statistics. It is safe to predict that approximately 500,000 
people will travel in the New York subway to-morrow, but 
no individual is thereby compelled to breathe bad air. Any- 
one is perfectly free to stay at home or to walk, without 
appreciably affecting the business of the Interborough Rapid 
Transit Company. The economic necessity of earning a 
living, however, and the fact that for a million of people 
the subway is the most rapid and convenient means of 
reaching the business districts where they are employed, 
combine to make the use of the subway definitely pre- 
dictable. 

As a matter of fact, the amount of "free will" which we 
enjoy is vastly over-estimated. A very large part of the 
actions of our individual lives are determined by the neces- 
sity of making a living. The bookkeeper does not add 
columns of figures ten hours a day because he loves the work, 
nor does a miner dig coal because he prefers fire damp to 
pure air. Even our choice of occupations is not entirely a 
free one. The chances are strong that the son will follow 
the same general line of work as the father. The lawyer's 
son may become a lawyer, a physician, or an engineer, but 
he is not very likely to become a laborer, except as a result 
of failure at some other chosen task. Likewise, our religion 
is rarely our free and deliberate choice. The chances of a 
Jewish child entering the Roman Catholic Church are slight, 



82 ELEMENTS OF SOCIALISM 

but a child of Roman Catholic parents is very likely to 
follow his parents into that church. 

Economic interpretation and ethics: According to the 
theory of economic causation, the economic basis of any 
society is largely influential in determining its moral con- 
sciousness. That which is immoral and socially condemned 
is that which is conceived to be harmful to the social group, 
either in the present or in the future. Since any interference 
with the prevailing method of gaining a livelihood must 
threaten the life of the group, conformity to the conceived 
economic interests of a group becomes its standard of virtue. 
Thus in primitive societies virtue involves loyalty to fellow 
tribesmen and the slaughter of enemies, physical strength, 
courage, sacrifices to the mysterious powers which control 
subsistence, and, where living conditions are very hard, 
the killing of the aged and infirm. In more advanced 
societies, respect for the private property of men in goods, 
slaves and wives becomes virtuous. As economic life becomes 
more complex, the moral code is expanded, involving a 
multitude of social relations unknown to men of an earlier 
stage of social development. 

Class ethics: Just as the vertical division of society into 
tribes and nations results in tribal and national moral codes, 
so the horizontal stratification of society into social classes 
brings about distinct class ethical codes. When it was immoral 
to kill a freeman it was no infraction of the moral code, no 
offense to the prevailing moral sense of the group, to kill 
a slave. The feeling of solidarity and common interests 
involves only the class, and since in a class state it becomes 
almost impossible to conceive of any action which would 
benefit all plasses equally, the classes come to have divergent 
codes of ethics. But it is always the ethical code of the ruling 
class which constitutes the recognized standard of morality 
at any given time. In the words of John Stuart Mill: 

"Wherever there is an ascendant class, a large portion 
of the morality emanates from its class interests and its class 
feelings of superiority. The morality between Spartans and 
Helots, between planters and negroes, between princes and 
subjects, between nobles and roturiers, between men and 
women, has been for the most Dart the creation of these 
class interests and feelings." 1 

1 John Stuart Mill, On Liberty. 






THE ECONOMIC INTERPRETATION OF HISTORY 83 

r 

The capitalist regards as virtuous honesty and fidelity 
to terms of contracts as between members of his class, and 
on the part of others toward members of his class, but is 
not strongly condemned by his fellows for himself breaking 
a wage agreement or for fleecing a "lamb" on the stock 
market. Charity is a virtue, and direct personal injury, 
even to a worker or any of his family, is wrong; but under- 
mining the health, destroying the lives and impoverishing 
the workers in the "legitimate" pursuit of business does not 
infringe the moral code. 

The wage-working class is also developing a code of ethics 
based on class loyalty, class solidarity and class conscious- 
ness. The wage-worker regards as virtuous strict fidelity 
to class interests and consistent opposition to the special 
interests of the capitalists, and detests the "scab" as a 
traitor to his class. The divergence of the ethical standards 
of the two classes is very clearly shown by the newspaper 
comments on the occasional acts of violence by strikers and 
their sympathetic allies. An assault upon a strike-breaker 
is regarded with horror by the capitalist press, while in the 
labor press it is very often condoned and excused. The 
strike-breaker has violated class ethics in a struggle which 
involves the most fundamental interests of the strikers and 
their families. The law does not enforce the ethical code of 
the working class because it is the subject class, and the 
law always reflects the ethical concepts of the ruling class. 
So the striking workman must either submit to defeat 
through the employment of men of his own class who violate 
its ethics, or resort to the primitive methods of enforcing 
the moral code. 

Superiority of working class ethics: While any code of 
class ethics must necessarily have many shortcomings, the 
ethical code of the working class is infinitely superior to that 
of the capitalist minority. It is superior, in the first place, 
because it is formulated in the interest of the great majority, 
while the ethical code of the capitalist class is formulated in 
the interest of a minority. It is superior, in the second place, 
because it assails with the greatest force of numbers possible 
in a class state the evils which injure the greatest number of 
persons. The well-being of the mass of mankind is advanced 
in proportion to the degree in which the ethical code which 



84 ELEMENTS OF SOCIALISM 

reflects the interests of an increasing proportion of the whole 
mass is recognized. This is only another way of saying that 
the maximum of satisfaction will result from the moral code 
which is the reflex of the maximum of human interests. 
As an ideal no ethical code based upon class dominance can 
satisfy. The perfect ethical code will not be bounded by 
class interests. The ethical code of the working class is the 
nearest approach to that ideal we have yet attained, for it 
reflects the largest proportion of the totality of human 
interests. 

Economic interpretation and law : In primitive society the 
ethical code was established by custom and its violation 
punished directly by the group. As society becomes more 
complex, custom develops into law which defines in detail 
the interrelations of men and states. Laws vary infinitely 
according to time and place, and their form and content are 
determined largely by the economic interests of the law- 
making class. Laws not only reflect the economic and social 
conditions of the time, but are designed for the purpose of 
preserving those conditions in so far as they are regarded 
as being necessary to the maintenance of the rule and power 
of the ruling class. This fact was frankly asserted in the 
class legislation of all ages previous to the capitalist era. 
The slave or the serf received little or no consideration, 
even when in the majority. Law is therefore essentially 
conservative, lagging behing the social advance and rarely 
recognizing a new condition until it has become established 
through force or the effective threat of force. 

The laws of capitalist society are likewise designed to 
preserve the existing conditions essentially unchanged. The 
greater part of our legal codes are taken up with rules for 
the protection and definition of private property. The 
assumption that all men are equal before the law is made to 
operate in favor of the property-owner, since the machinery 
of tl\e law is chiefly concerned with his protection, and does 
not recognize the weaker position of the poor litigant who 
cannot employ the best legal talent. 

Class influence upon legal codes: The influence of class 
is strongly marked in all our legal codes. The old principles 
have been strengthened with every change in property 
forms, but the corresponding interests of the wage-workers 



THE ECONOMIC INTERPRETATION OF HISTORY 85 

have been neglected. In the matter of the wage contract 
and the responsibility of the employers for the dangers of 
employment the law rarely interferes, except in a half- 
hearted way, while the minutest details of property rights 
are covered by statutes. When a law is made to apply to 
both labor and capital, as in the case of the Sherman Anti- 
Trust Act, it is enforced against labor, but is ineffective 
against capital. 

Thus are laws enacted and enforced in conformity with the 
economic interests of the dominant class, and the only 
progressive steps taken conform to the recognized economic 
interests of the majority, the working class, which, in the 
countries where manhood suffrage obtains, is able to obtain 
concessions by effectively threatening the supremacy of the 
ruling class. 

The great man in history: To what extent are individuals 
responsible for great social changes? No one denies that 
Napoleon Bonaparte influenced the course of European 
history, or that Karl Marx influenced the development of 
the Socialist movement. But a man in the present day, 
having all the qualities and gifts of Napoleon, could not 
influence the history of Europe in the same way or to the 
same extent. If Karl Marx had lived before the Industrial 
Revolution he would not have formulated the Socialist 
theories which are associated with his name. On the other 
hand, Europe would have developed in political and indus- 
trial organization substantially as it has done if Napoleon 
had never left Corsica, and there would have been a Socialist 
movement and an economic interpretation of history if 
Marx had never lived. It is only when economic conditions 
are ripe that individuals appear to exert a determining 
influence upon historical developments. Great individualities 
which profoundly influence the course of historical develop- 
ment do not exist of themselves, independent of conditions. 
They are the products of favorable combinations of economic 
and social circumstances, of a perception of needs formed in 
the matrices of such combinations of circumstance, or of 
crises which conduce to the highest development of qualities 
of initiative and leadership which would otherwise either 
remain dormant or be directed to other ends. There are 
certain limits between which a man may freely act and within 



86 ELEMENTS OF SOCIALISM 

whicn he may succeed, but these limits are defined by 
economic and social conditions. Even the limited area of 
freedom indicated is in fact still further restricted by such 
factors as heredity. 

Marx tells of an inventor who devised a multiple loom as 
early as the fifteenth century. Perhaps in one sense he was 
greater than Hargreaves, but the economic conditions were 
not ripe for such a loom and the man was put to death and 
his invention destroyed. When the domestic system had 
developed and the embryonic capitalist forms were ready 
then the power loom was developed, and its inventors have 
been universally acknowledged as great men. 

Applications of the theory to American history: The 
greatest value of the theory of the economic interpretation 
of history lies in the fact that by means of it we can explain 
the origin and development of the various stages of social 
evolution and their relation to each other. In the preceding 
chapter we have sketched the main lines of social evolution 
and seen that each fundamental change in the organization 
of society, and even each general advance in culture, arose 
from changes of an economic character to which they can 
be traced with practical certainty. 

But while this is the chief value of the theory, it also has 
value as an explanation of a large part of the important 
specific events of history. For our present purpose it will 
be sufficient to consider, briefly, a few of the most conspicuous 
events in American history in the light of the theory. 

It was the commerce of the handicraft stage, checked by 
the pastoral barbarians of Turkey and Persia, which led 
to the imperative demand for a new route to India and sent 
forth such adventurers as Columbus, Vasco da Gama and 
John Cabot. The Norse discovery of America about the 
year 1000 was futile and without influence upon the develop- 
ment of Europe because there had not yet arisen the need 
for a new outlet for trade and colonization. 

Every war which the United States has fought has been of 
economic origin. The Revolutionary War was due to the 
economic exploitation of America by England. The war 
of 1812 was due to England's interference with our commerce. 
The Mexican War was due to land hunger on the part of the 
agricultural South which was losing in the competition with 



THE ECONOMIC INTERPRETATION OF HISTORY 87 

the industrial North, a competition more bitter even than 
that which preceded the Protestant revolt in Europe because 
it was between the agricultural stage of social evolution and 
the industrial stage, whereas in the earlier European struggle 
the conflict was between two stages very much nearer to 
each other, the agricultural stage and the handicraft stage. 
The South must extend its area and its institutions, including 
slavery, or be crushed by the North. Mexico was the 
unhappy victim. The Civil War, while it arose over the 
right of secession, apparently an exclusively political ques- 
tion, was in reality the culmination of the same great struggle 
between two different and widely separated economic stages, 
the agricultural and the industrial, and ended, as was 
inevitable, in the victory of the higher stage. The Spanish- 
American War was fundamentally due to the prevention of 
the free development of the Cuban sugar industry through 
Spanish misrule, and the consequent interruption of a profit- 
able American trade. 

Objections to the theory: The principal criticisms of the 
economic interpretation of history can be grouped as follows: 
(1) the alleged antecedence of social organization to the 
economic environment; (2) the claim that the theory is an 
insufficient explanation of the facts; (3) the claim that it is 
"sordid." 

Concerning the first criticism, it is a sufficient reply to 
state the fact that the question of the priority of society or 
environment is not involved in the theory. No social change 
can take place without the existence of both society and 
environment. A certain amount of variation is possible 
in a static environment, but when environmental changes 
take place it is the best adapted forms which survive the 
new conditions. Social groups can also transform their 
environment within narrow limits, as Holland has been 
transformed by its people and as the desert is made productive 
by irrigation. But it is just in these cases that environ- 
mental influence is most pronounced. Everyone knows 
how the history of Holland has been conditioned and deter- 
mined in conformity with its economic conditions, and 
irrigation at once makes possible the existence of a civilized 
society where it was not possible before. 

The second criticism, that the theory is insufficient as an 



88 ELEMENTS OF SOCIALISM 

explanation, is only valid when directed against exaggera- 
tions of the theory. The criticisms of Eduard Bernstein and 
other members of the "Revisionist" group within the inter- 
national Socialist movement, for example, apply not so 
much to the theory itself, as Marx and Engels developed it, 
as to the crude applications of it by some of their disciples. 
As Frederick Engels himself has remarked, "It is unfor- 
tunately only too common for a man to think he has perfectly 
understood a theory and is able forthwith to apply it, as 
soon as he has made the chief propositions his own." l 

It may be freely admitted — as Engels himself has done — 
that in their earlier statements of the theory Marx and 
Engels were not always careful to make it clear beyond the 
possibility of honest misconception that they recognized the 
influence of spiritual and other non-economic factors upon 
historical development. But he who would either employ 
or judge a theory must take it in its most developed form, 
that is, in the form which comprises the fullest and maturest 
thought of the minds responsible for the theory. Criticisms 
of the theory which confine themselves to the earlier and 
cruder statements of it, and ignore the later developments 
and improved statements of it, is not honest criticism. It 
may also be admitted that, even in the statements of the 
theory by Engels toward the end of his life, the sense of 
proportion is not perfectly maintained, and that the sphere 
of influence ascribed to spiritual and ideological factors is 
too limited. But these things do not touch the essentials 
of the theory. It is a sufficient reply to the objection that 
the theory does not afford a sufficient explanation of the 
whole progress of human history, to point to the fact that 
neither Marx nor Engels claimed that it did anything of the 
sort. It is essentially a criticism directed against a mis- 
conception and misstatement of the theory, rather than 
against the theory itself. 

Not much time need be wasted in a discussion of the 
criticism that the theory is sordid, and that it is unworthy 
of humanity to attribute its activity and its progress to 
economic conditions. The question to ask is not "Is the 
theory pleasing?" but "Is it true?" We might as well 
deny that the beauty of the rose is made possible only 

1 Engels, Anti-Duhring, 



THE ECONOMIC INTERPRETATION OF HISTORY 89 

through the unlovely soil in which its roots are sustained, 
as refuse to admit that the finest idealism may be rooted in 
the commonplace processes of making a living. 

General acceptance of the theory: Through the general 
acceptance of the principle of evolution and the idea of the 
continuity of the historical process, the economic interpreta- 
tion of history has gained acceptance far beyond the limits 
of the Socialist movement. People may differ as to the 
application of the theory and the conclusions to be drawn 
from it, but there is no longer any great opposition to the 
theory in its application to the great social transformations 
of the past, to religious forms, to ethical and legal codes 
and to a large number of important specific historical events. 

In the light of the theory we are now in a position to 
discuss the development of the economic organization of 
society as the basis for a further treatment of Socialist 
theories and ideals. 



90 



ELEMENTS OF SOCIALISM 



SUMMARY 

i. Socialists regard economic forces as the chief factors in the bring- 
ing about of social change. 

2. The Economic Interpretation does not exclude the "spiritual 
factors"; it is not fatalistic and does not deny free will. 

3. The economic factors largely determine religious forms, ethical 
standards and the content of legal codes. 

4. The Economic Interpretation of History applies primarily to the 
explanation of stages in social evolution, but at the same time it 
directly explains many specific historical events. 



QUESTIONS 

1. What was the origin of the theory of the Economic Interpretation 
of History? 

2. Why is the term "economic" preferable to "materialistic" in 
this connection? 

3. What factors other than the economic have influenced history? 

4. In what ways have the economic factors influenced religious 
forms? Ethical codes? 

5. How are economic class distinctions reflected in legal codes? 

6. What is meant by the "Great Man" theory of history? 

7. Illustrate the economic interpretation theory by events in Ameri- 
can history. In English history. 

8. What are the chief objections to the theory and how do Socialists 
answer them? 



Literature 

Hillquit, M., Socialism in Theory and Practice, Chap. Ill and IV. 

Kautsky, K., Ethics and the Materialistic Conception of History. 

Marx, Karl, Capital. Contribution to the Critique of Political 
Economy, Preface. 

Rogers, J. E. T., The Economic Interpretation of History. 

Seligman, E. R. A., The Economic Interpretation of History. 

Simons, A. M., Social Forces in American History. 

Spargo, John, Socialism, a Summary and Interpretation of Socialist 
Principles, Chap. IV. 



CHAPTER X 

INDUSTRIAL EVOLUTION 

The economic stages: Any classification of economic 
history must necessarily be somewhat arbitrary, for the 
whole process of development has been subject to variation. 
In different parts of the world the social groups have lived 
under varied environmental conditions. 

Some writers have divided economic history into stages 
on the basis of labor forms, as: 

(1) Independent or communal labor with slaughter of 
enemies. 

(2) Slavery and serfdom. 

(3) Wage-labor regulated by individual contract. 

(4) Collective bargaining. 

Other writers have taken the process of exchange as the 
basis of classification and describe three stages: 

(1) 'Truck" or barter economy. 

(2) Money economy. 

(3) Credit economy. 

Perhaps the most common classification is that based on 
production and the increasing control of man over nature. 
The division is into five stages: 

(1) The stage of direct appropriation. 

(2) The pastoral stage. 

(3) The agricultural stage. 

(4) The handicraft stage. 

(5) The industrial stage. 

Finally, the German economist, Buecher, classifies economic 
history on the basis of the development of the economic unit: 

(1) The stage of household economy. 

(2) The stage of town economy. 

(3) The stage of national economy. 

(4) The stage of world economy. 

These classifications are not at all conflicting, and all are 

91 



92 ELEMENTS OF SOCIALISM 

suggestive. The two last classifications, however, best 
explain the historical process. 

The stage of direct appropriation: This is the primitive 
stage of human development in which man lived by hunting 
and fishing, and by the vegetable foods, such as nuts, fruit 
and roots, which could be obtained without cultivation. 
It corresponds to the epoch of savagery in social evolution. 
Exchange and the transfer of goods are unimportant. 
Primitive communism is the rule and there are no sharply 
marked social classes. 

There is a marked difference between tribes in this stage 
who live chiefly by hunting and those who life chiefly by 
fishing or subsist on a vegetable diet. The hunting tribes 
are more warlike, occupy a larger territory and are generally 
of a higher physical type. Their dwellings are very simple 
and usually temporary. Fishing tribes are peaceful and 
occupy restricted territories near the sea coast. They build 
permanent dwellings and construct boats and fishing imple- 
ments. 

The pastoral stage: This stage is marked by the domes- 
tication of animals, and the care of large flocks of sheep 
and herds of cattle. Pastoral groups are usually migratory 
or nomadic, wandering from place to place in search of the 
best pasturage, and living in tents. This stage corresponds 
with the middle stage of barbarism in Europe and Asia. 
The life of the Hebrew patriarchs, Abraham, Isaac and 
Jacob, as described in the book of Genesis, is a perfect 
example of life in the pastoral stage. 

Slavery became general in the pastoral stage and the con- 
ception of private property was greatly extended. Social 
distinctions became clearer. Men of great wealth like 
Abraham were powerful chiefs, and were absolute rulers of 
the households of wives, concubines, descendants, followers, 
and slaves. Private property in land was not yet generally 
recognized and there was little commerce. Such commerce 
as there was took the form of barter. 

The agricultural stage: The agricultural stage opens up 
an entirely new field of activity to man. Having already 
learned the food uses of fruits, grains, nuts and roots, and 
how to manage animals, he now combines his knowledge and 
becomes a plant producer. A denser population becomes 



INDUSTRIAL EVOLUTION 93 

possible. Fertile valleys like those of the Tigris-Euphrates 
and the Nile become the homes of millions of men. The idea 
of land ownership first developed in the agricultural stage, 
although even then ownership by the village community, 
rather than by the individual, was the rule. Slavery grad- 
ually developed into serfdom, a condition of servitude in which 
the subject enjoyed more privileges than under slavery, but 
was not free to migrate at will. Commerce grew in impor- 
tance, mainly because the wealthy class grew in strength and 
demanded foreign luxuries. The denser population made 
necessary a more efficient government and more detailed 
laws. This is the stage of the Babylonian Code of Ham- 
murabi and of the Mosaic law. It was during the agricultural 
stage that the civilizations of antiquity developed. 

The agricultural stage persisted through the early Middle 
Ages and developed into the so-called manorial economy 
and its political counterpart, the feudal system. In the 
thirteenth century the population of England was largely 
concentrated in villages or manors ruled by a lord, to whom 
the people were bound. The land of the manor was divided 
into three great fields which were cultivated in rotation, 
one always lying fallow. Each villein tenant held a strip 
of land in each of these fields which he was entitled to 
cultivate and was required to devote a part of each week 
to the cultivation of the part of the land especially reserved 
for the lord of the manor. 

The handicraft stage : With the development of the cities 
and the commerce of the later Middle Ages, the trades 
and hand manufacture became predominant and the agri- 
cultural organization as represented by the feudal system 
and the manor began to decline in relative importance. 
Towns which had become centres of trade won their inde- 
pendence from the feudal lords, and the handicraftsman who 
had long plied his trade as a servant on the feudal estate 
gained an independent and powerful position. 

As the town was first a trading centre the first rulers of the 
towns were the merchants, who in the twelfth century in 
England were organized into guilds which at once protected 
trade and formed the basis of the political organization of 
the towns. As the craftsmen grew in numbers and importance 
they were admitted into the merchant guilds, which they 



94 ELEMENTS OF SOCIALISM 

later supplanted with their own craft guilds. These craft 
guilds grew so powerful that by the fourteenth century they 
were the real rulers of the English cities. 

Each trade has its own guild of masters presided over by 
its own alderman, who in conjunction with the aldermen 
of other guilds formed the governing body of the town. 
Membership in a guild was usually confined to those who 
had served their apprenticeship and later had worked as 
journeymen and become masters. As the system became 
more rigid it became increasingly difficult for journeymen 
who were entitled to join the guilds and thus become masters 
to secure admission to membership in the guilds without 
powerful influence to assist them. For their own protection 
the journeymen organized other guilds of their own, the 
"Bachelors' Companies," which in organization and tactics 
were somewhat similar to a modern trade union. 

The next step in industrial evolution, which bridges the 
gap between the true handicraft stage and the industrial 
stage is known as the domestic system. The guild master 
became a petty capitalist who received the raw materials 
from a middleman and gave them out to artisans who lived 
largely in the country and devoted a part of their time to 
agriculture. These artisans, who were the successors of 
the journeyman, had no control over the marketing of the 
product of their labor. 

The industrial revolution: Then came the sudden and 
fundamental change in methods of production which fol- 
lowed the invention of the steam engine and power machinery 
in the last half of the eighteenth century. Every previous 
change in the forms of industry had been so slow as to 
cover many generations in the process of transition, but this 
was rapid and relatively sudden, a true industrial revolution. 

The manufacture of textiles was at this time the most 
important industry in England. Under the handicraft and 
the domestic systems, all the work of spinning and weaving 
had to be laboriously done by hand. The first of the series 
of great inventions came in 1738, when Kay invented the 
flying shuttle. Then came Hargreaves' spinning jenny, in 
1767, then Arkwright's water frame and the combination 
of the two into the "mule" by Crompton. Cartwright then 
developed the power loom and Whitney's cotton gin increased 



INDUSTRIAL EVOLUTION 95 

the supply of raw material. With the application of steam 
power to spinning and weaving the domestic system came 
to an end. It was no longer profitable to send out work 
to be manufactured in homes. The workmen had to be 
gathered together into factories where the power could be 
economically applied. The master craftsman, who had 
become the merchant under the domestic system, giving out 
work and selling the product, now became the owner of 
the factory, while the journeyman, with his ranks recruited 
from the peasants of the country estates, became the factory 
worker, the proletarian of the modern industrial world. 

The transition came so rapidly as to cause a great deal of 
distress and social anarchy. An entirely new set of economic 
conditions had to be faced, and governments and laws formed 
under the old system were incapable of adaptation to the 
needs of the worker for protection. The new machines could 
be operated by children better than by the old weavers and 
spinners, and the struggles of the displaced workers to gain 
a livelihood form one of the most tragic chapters in the 
history of industrial development. Weavers who had made 
a comfortable living by the labor of eight hours a day, 
supplemented by the products of their little farms, now could 
barely keep from starvation by working sixteen hours out 
of twenty-four. Children had always worked under the 
old system, but the work had been done at home, and was 
divided between the apprentice work at the loom and the 
outdoor work of the farm. Under the new system they were 
massed together in factories under masters who had no 
personal interest in them, and worked fourteen hours a day 
under frightfully unsanitary conditions. The first attempts 
of workmen to organize unions were checked by stringent 
and often savage laws. The popular resentment very natu- 
rally led to machine-breaking riots. The old land-owning 
aristocracy was obliged to yield political power to the new 
lords of industry and England became a capitalist state. 

The industrial stage : This is the stage of economic evolu- 
tion in which the civilized world lives to-day. Production 
is carried on by means of power machinery on a large scale. 
This machinery is owned and controlled by a distinct class. 
Industry is so specialized that no one workman turns out a 
finished product which is to aity large extent his own work. 



96 ELEMENTS OF SOCIALISM 

Trade and commerce have been developed until markets 
are international, and a credit system has taken the place of 
cash payment. 

But although our age is essentially industrial, all of the 
other stages of production are still represented at the present 
day. Not only are there tribes and peoples in various parts 
of the world who represent all of the earlier stages of indus- 
trial evolution, but in our own civilization all the older forms 
of production are to be found. The stage of direct appropria- 
tion is represented wherever there are things of value to be 
taken by man direct from nature, for his own use. Hunting 
and fishing are by no means abandoned. The pastoral stage 
is represented by the great cattle and sheep ranges of the 
West and of South America and Australia. Agriculture never 
even declined in absolute importance, although other forms 
of production have developed since the agricultural stage 
which, because of their greater relative importance, have 
become the characteristic and dominant economic forces. 
Handicrafts are still carried on wherever machine methods 
have not been introduced, as in bricklaying, and for certain 
purposes nearly all the old crafts are carried on to-day. 
The domestic system has degenerated into the sweatshop 
and become one of the worst forms of modern exploitation. 
Old forms do not die. They simply change in relative 
importance. 

The development of the economic unit: Along with the 
increase in the power of man to control the forces of nature 
has come a progressive enlargement of the economic unit. 
The number and variety of wants has continually increased, 
and a progressively greater and more intricate organization 
of society becomes necessary. The stages in this process 
may be described as follows: 

(a) Independent household economy: Production was at 
tirst, and even later in the pastoral and agricultural stages, 
carried on by the household. The products were likewise 
consumed by the household. Trade and commerce were 
unimportant before the handicraft stage. The Greek house- 
hold from which we get our word "economy" was an inde- 
pendent economic unit. Agricultural products were grown 
for use and not for commerce. Slaves skilled in all trades 
were employed and there was very little which any member 



INDUSTRIAL EVOLUTION 97 

or retainer of the household needed to get from beyond the 
estate. The life of a savage or barbarous family is a more 
simple example. The man does the hunting and fighting, 
the woman makes the clothing, prepares the food and bears 
the burdens. The family can exist comfortably without 
any dependence upon the rest of the world. 

(b) Town economy: With the building of cities and the 
diversification of industry, the independent economy became 
impracticable. It was more profitable for the weaver to 
give all his time to his trade and buy his food supplies else- 
where, giving in exchange his cloths or the money received 
from their sale. But it was no more than an extension of 
the household economy for little was used which was not 
produced within or near the town. Commerce was largely 
local, and the town could exist without regard to the State 
or other towns. 

(c) National economy: With the improvement of the 
means of communication, and the perception of the advan- 
tages of trade between cities, the nation became the economic 
unit. In England the products of the mines of the South- 
west were exchanged for the agricultural products and the 
manufactures of the East and North. The town was no 
longer self-sufficient and independent. But the nation still 
produced all that it needed to consume. The period of 
national economy was marked by the welding together of 
towns and principalities into powerful modern States. To 
enhance the importance of the nation, taxes on internal trade 
were abolished and tariffs were imposed on imports from 
other countries. Patriotism was encouraged and sectional- 
ism discouraged. Thus national economy supplanted town 
economy. 

(d) World economy: The stage has now passed when 
there is an advantage in maintaining a national economy. 
The railway, steamship, telegraph and ocean cable have 
brought the nations of the world nearer together than 
provinces were during the development of national economy. 
Markets have become world-wide. No country is entirely 
©elf -sufficient, and such countries as England are so dependent 
upon other nations that even a temporary check to commerce 
involves great hardship, as when the American Civil War 
stopped the importation of raw cotton and reduced the 



98 ELEMENTS OF SOCIALISM 

Lancashire operatives to abject poverty. Capital knows no 
national lines. It is essentially international. The migration 
of masses of laborers from one country to another in response 
to the demands of industry, the spread of education and 
increasing ease of international communication have resulted 
in a highly developed sense of international solidarity of 
class interest. National lines which once served to extend 
the economic unit from town to nation, now impede further 
growth, and patriotism, which was once a broadening senti- 
ment tending to replace excessive loyalty to the town by a 
larger loyalty to the nation, has in its turn become, in its 
extreme forms, a hindrance to further development and a 
menace to the peace of the world. 






INDUSTRIAL EVOLUTION 99 

SUMMARY 

1. Economic history may be divided into stages on the basis of the 
increasing control by man over nature. 

2. In the first stage men live by hunting and fishing; the second is 
characterized by the domestication of animals and the introduction 
of slavery; in the third stage agriculture is developed; the fourth is 
characterized by handicraft industry and the fifth stage begins with 
the development of power machinery and the factory system. 

3. These stages have differed materially in different parts of the 
world and their form has been modified by geographical and climatic 
conditions. 

4. A new method of gaining a livelihood does not usually displace 
an older form, but subordinates it, thus adding to the complexity of 
economic fife. 

5. Economic history is also classified on the basis of the progressive 
enlargement of the economic unit from the household through the town 
and nation to a world economy. 

QUESTIONS 

1. What are the characteristic features of the stage of direct appro- 
priation? Of the pastoral stage? Of the agricultural stage? 

2. Describe the manorial system. In which stage does it belong? 

3. Explain the organization and functions of the craft guild. 

4. What was the domestic system of industry? 

5. What is meant by the " Industrial Revolution"? 

6. Name the chief inventions which brought about the industrial 
revolution. 

7. Compare the industrial stage with the handicraft stage. 

8. Characterize the household economy, the town economy, the 
national economy. 

9. What facts lead us to expect the realization of a world economy? 



Literature 
Buecher, C, Industrial Evolution. 

Coman, Katherine, The Industrial History of the United States. 
Ely, R. T., Studies in the Evolution of Industrial Society. 
Hobson, J. A., The Evolution of Modern Capitalism. 
Morgan, L. H., Ancient Society ', Part I, Chap. II and III. 
Spencer, Herbert, Principles of Sociology, Vol. Ill, Part VIII. 
Toynbee, A., The Industrial Revolution, Chap. IV. 



CHAPTER XI 

THE CLASS STRUGGLE THEORY 

The theory stated : The class struggle theory is a part of 
the economic interpretation of history. Ever since the 
dissolution of primitive tribal society, the modes of economic 
production and exchange have inevitably grouped men into 
economic classes. In his Introduction to the Com- 
munist Manifesto Frederick Engels thus summarizes the 
theory: 

"In every historical epoch, the prevailing mode of eco- 
nomic production and exchange, and the social organization 
necessarily following from it, form the basis upon which is 
built up, and from which alone can be explained, the political 
and intellectual history of that epoch; and, consequently 
the whole history of mankind (since the dissolution of primi- 
tive society, holding land in common ownership) has been a 
history of class struggles, contests between exploiting and 
exploited, ruling and oppressed classes; that the history 
of these class struggles forms a series of evolution in which, 
nowadays, a stage has been reached where the exploited and 
oppressed class — the proletariat — cannot attain its emancipa- 
tion from the sway of the exploiting and ruling class — the 
bourgeoisie — without at the same time, and once and for all, 
emancipating society at large from all exploitation, oppres- 
sion, class distinctions, and class struggles." 

Analysis of the statement: In this statement there are 
several important propositions. First, that class divisions 
and class struggles arise out of the economic life of society. 
Second, that since the dissolution of primitive society, 
which was based upon communism, mankind has been 
divided into economic classes, and that all its history has 
been a history of struggles between these classes, ruling 
and ruled forever warring against each other. Third, it is 
implied rather than stated that the different epochs in human 

100 



THE CLASS STRUGGLE THEORY 101 

history have been characterized by the interests of the ruling 
classes of these epochs. Fourth, that a state has now been 
reached in the evolution of society in which the struggle 
assumes the form of a contest between the proletariat and 
the capitalist class. Fifth, that the proletariat by eman- 
cipating itself will destroy all the conditions of class rule, 
and in doing so will emancipate all society from the evils 
attendant upon class struggles. 

Opposition to the theory: No other phase of the Socialist 
philosophy has attracted so much criticism as this doctrine 
of the essential antagonism of social classes. The criticism 
has taken two distinct forms — that of denying the existence 
of social classes, and that of accusing the Socialists of 
fomenting class hatred. 

That there are no class distinctions in America has been 
a part of the national tradition. The absence of legalized 
caste and of all titles of nobility, and the numerous examples 
of self-made men — the rail-splitter who became President, 
and the millionaires who as poor boys sold newspapers on 
the streets — lend support to the tradition. There is no 
formal legal barrier separating the classes, and the nouveau 
riche is still a familiar type. This form of criticism is based 
upon the false assumption that a social class must necessarily 
be a crystallized social group, the membership of which is 
based upon inheritance. But though we have no hereditary, 
titular ruling class, the division of the population into classes 
is very obvious. 

The second form of criticism directed against the theory 
tacitly admits the existence of social classes, but denies that 
they are based upon antagonistic interests which are irrecon- 
cilable. It asserts that the major interests of the two classes 
are identical, and ascribes all industrial conflicts to "unfor- 
tunate misunderstandings between capital and labor/ ' or 
to the work of "dangerous agitators." It accuses the 
Socialists of inciting the workers to violent assaults upon the 
industrial order, from which assaults the workers themselves 
must suffer equally with their employers. 

This criticism, it may be admitted, is generally honest 
and sincere. It is based upon an entire misconception of the 
whole theory, however. It assumes that the Socialists are 
engaged in creating a class struggle, instead of which they 



102 ELEMENTS OF SOCIALISM 

■ \ 

are simply directing attention to the existence of a class 
struggle resulting from the conditions of social evolution. 
The class struggle is, from the Socialist point of view, simply 
a law of social development, for which the Socialist is as 
little responsible as Newton was for the law of gravitation. 
There were class struggles thousands of years before there 
was a Socialist movement. 

Definition of the word "class": It will help us to avoid 
much confusion and misunderstanding of the theory if we 
start with a clear conception of the meaning of the word 
"class." What is an economic class? In order that we may 
intelligently discuss any theory based upon the existence 
of economic classes we must first of all be able to answer 
that question. 

In the first place, the term obviously refers to a grouping 
of individuals based upon economic relation and status. 
It does not refer to the grouping which results from a selective 
process based upon the choice of the individuals because 
they are congenial to each other, or because they hold certain 
ideas in common. Such a grouping, however large it might 
be, would not be an economic class. It is not enough to say 
that the grouping must be based upon economic relation and 
status, however. All the persons connected with the steel 
industry, for instance, from the multi-millionaire head of a 
corporation to the poorest paid laborer, might be regarded 
as a class, because of that economic relation and status, 
that is, because they were all engaged in a distinct branch 
of economic activity, regardless of the fact that the multi- 
millionaire on top and the laborer at the bottom might 
well be said to live in different worlds. 

The income basis: Many writers have taken income as 
the most satisfactory basis for the classification of society 
into economic classes. Mr. W. H. Mallock, for example, 
in his Classes and Masses y makes relative income the test 
of class membership, and arbitrarily divides English society 
into classes accordingly. By this method a skilled artisan 
earning two pounds a week and a feeble-minded pensioner 
of a rich relative living upon two pounds a week are regarded 
as belonging to the same "class," despite the fact that the 
artisan has never known the luxury of a week's rest, and 
that the pensioner has never done a day's work. The income 



THE CLASS STRUGGLE THEORY 103 

basis results simply in the old, crude and unscientific division 
of society into rich and poor. 

The source of income basis: The only satisfactory basis 
for the classification of society is that of similarity of eco- 
nomic functions and interests in the prevailing economic 
system. In other words, source of income, rather than 
amount of income, is the test of class membership. In every 
form of industrial society there appears a social class forma- 
tion based upon the source of income or mode of obtaining 
the necessities of life common to the members of the respec- 
tive classes. Within each class the individuals may compete 
against each other, each striving to obtain as large a share 
as possible of the total available wealth, but the unity and 
solidarity of the class as a whole is invariably shown by its 
resistance to any attack made upon its material interests 
by any other class. The characteristic features of an eco- 
nomic class, then, are that its members are united by their 
general economic interests, and that as a whole the class 
opposes every attempt of any other class to invade its 
interests. 

We may say, therefore, that an economic class consists 
of an aggregate of persons having similar specific interests 
in the prevailing economic system, and whose functions in 
that system are likewise similar. Thus it is the special 
interests of the producers, as producers, which make them 
a class. They may share certain important general interests 
with all the rest of society, but their particular interests as 
producers they hold against all the rest of society. By 
similarity of functions we do not mean identical functions. 
Miners and bakers are engaged in very different occupations, 
but they perform similar functions* in the sense that they 
are producers of wealth and not mere consumers. As 
against all who are consumers of wealth merely, they have a 
common class interest. 

Antiquity of class divisions and struggles: Class divisions 
have existed ever since slavery began in the epoch of barbar- 
ism. When prisoners of war began to be exploited rather 
than killed, society became for the first time divided into 
definite classes. The conflict of interests between master 
and slave is obvious. The class struggle existed even though 
the ignorance, degradation and lack of opportunity for dis- 



104 ELEMENTS OF SOCIALISM 

cussion which limited the slaves made effective resistance 
impossible. Sporadic revolts were always crushed with 
relentless brutality. 

The feudal age is one of recognized social class distinctions. 
The conspicuous divisions were between lord and serf, 
whose interests were as obviously antagonistic as those of 
master and slave in the preceding regime. Feudal class 
distinctions also arose through conquest, as, for example, 
the subjugation of the Britons by the Saxons and, later, by 
the Normans. As we have seen, the freemen who settled 
in the towns as tradesmen and craftsmen developed by the 
eleventh century a powerful middle class, closely organized 
in guilds and gaining control of some of the most important 
sources of wealth. The interests of this class were opposed 
to those of the feudal nobility just as were the interests of 
the serfs, but they were better able to make effective resist- 
ance and to wage war upon the nobility. By the beginning 
of the nineteenth century this class had won a complete 
victory and itself became the dominant, ruling, employing 
class. 

Character of classes in capitalist society: The capitalist 
class in its victory brought with it out of its life as a subject 
class the theories of political democracy and laissez faire. 
It established the modern State in such a form that no legal 
guarantee of the integrity of any class was possible. The 
rigidity of class divisions under feudalism was broken and 
passage from class to class became common. But the de- 
velopment of the economic has accomplished by a gradual 
and almost imperceptible process that which the State 
could not do. It has made the passage from the lower class 
to the class above increasingly difficult, and, while there 
is no guarantee as yet of the absolute integrity of the master 
class, practically that result has, to a very large degree, 
been attained. Transition from the status of wage-worker 
to that of capitalist, which was common and relatively easy 
in the earlier stages of capitalism, becomes increasingly 
rarer and more difficult with the era of concentration and 
the immense capitals required for industrial enterprise. 
Passage from the lower class to the upper tends to become 
almost as rare as the transition from pauperism to princedom 
in the Old World. An impecunious coachman may marry a 



THE CLASS STRUGGLE THEORY 105 

princess, and so enter the sacred circles of royalty. Such 
instances are little rarer than marriages between common 
laborers and the daughters of our lords of industry and 
finance. Thus class lines tend to become permanently fixed. 

The principal and characteristic class division of capitalist 
society is that which separates the employing, wage-paying 
class from the employed, wage-receiving class. It is clear 
that where it is to the interest of the employer to produce 
as cheaply as possible and sell at the highest rate of profit, 
his interest conflicts with that of the wage-worker, who 
wishes to get the highest possible wage for the least possible 
effort, and who has no responsibility for the conduct of the 
business as a whole. The exceptionally loyal and efficient 
man may become a foreman, or even a partner in the business, 
but if all employees were equally loyal and efficient they 
would be no better off, as a group, than now. If they turned 
out a greater product, their wage under the competitive 
wage system might even be less. As employer and employee, 
then, their particular interests are fundamentally antag- 
onistic. 

The Economists on class divisions: The contention is, 
then, that the employer as such and the employee as such 
have opposing interests for which they must struggle in order 
to maintain or improve their status, and that in consequence 
society becomes stratified along the lines of these class 
divisions. These facts have been perceived clearly enough 
by some of the great economists. Thus, Adam Smith, in 
his Wealth of Nations, states the matter as clearly and forcibly 
as any Socialist of the present day: 

"The workmen desire to get as much, the masters to give 
as little, as possible. The former are disposed to combine 
in order to raise, the latter in order to lower the wages of 
labor. . . . Masters are always and everywhere in a sort 
of tacit, but constant and uniform combination, not to raise 
the wages of labor above their actual rate. To violate this 
combination is everywhere a most unpopular action, and a 
sort of reproach to a master among his neighbors and equals. 
... Masters too sometimes enter into particular combina- 
tions to sink the wages of labor. . . . These are always 
conducted with the utmost silence and secrecy until the 
moment of execution. . . . Such combinations, however, are 



106 ELEMENTS OF SOCIALISM 

frequently resisted by a contrary defensive combination 
of the workmen; who sometimes too, without any provoca- 
tion of this kind, combine of their own accord to raise the 
price of labor. . . . They are desperate and act with the 
extravagance and folly of desperate men, who must either 
starve or frighten their masters into an immediate compliance 
with their demands. The masters upon these occasions 
are just as clamorous upon the other side and never cease 
to call aloud for the assistance of the civil magistrate, and 
the rigorous execution of those laws which have been enacted 
with so much severity against the combinations of servants, 
laborers and journeymen." * 

The basis of the class struggle, and the fact that an 
improvement in well-being intensifies rather than checks 
class strife, are clearly suggested by the following passage 
from John Stuart Mill: 

"Notwithstanding the effect which improved intelligence 
in the working classes, together with just laws, may have in 
altering the distribution of the produce to their advantage, 
I cannot think it probable that they will be permanently 
contented with the condition of laboring for wages as their 
ultimate state. To work at the bidding and for the profit 
of another, without any interest in the work — the price of 
their labor being adjusted by hostile competition, one side 
demanding as much and the other paying as little as possible 
— is not, even when wages are high, a satisfactory state to 
human beings of educated intelligence, who have ceased to 
think themselves naturally inferior to those whom they 
serve. They may be willing to pass through the class of 
servants on their way to that of employers; but not to 
remain in it all their lives." 2 

Common general interests of the classes: Aside from 
these special relations, the classes have many things in 
common. As in the case of the lord and the serf, the capital- 
ist and the laborer may belong to the same church and 
have religious interests in common, but even here, more than 
ever before since the founding of the Christian Church, 
religious bodies tend to give the same recognition to class 

1 Adam Smith, Wealth of Nations, Vol. I, Book I, chap. viii. 

2 John Stuart Mill, Principles of Political Economy, Book IV, chap, 
vii. 



THE CLASS STRUGGLE THEORY 107 

lines as do secular organizations. A poorly dressed woman 
feels as much out of place in an aristocratic church as she 
would in an aristocratic club. The classes may also have 
common racial and national interests, and these may at 
times even counterbalance their economic antagonism. 
They may even have a common industrial interest in the 
development of an industry in which they are engaged, and 
fear equally the results of depression in trade or of hostile 
legislation. 

Individuals versus classes: There will always be found 
in every class individuals who either do not recognize their 
class interests, or who consciously ignore them. To the 
former group belong those workingmen who, unconscious of 
their class interest, take the side of their employers in 
industrial disputes, refuse to join labor organizations and 
boast of their loyalty to their employers. To the latter 
group belong those who subordinate the class interest which 
they clearly perceive to some other interest which they 
regard as being more important. Among such interests 
may be mentioned the racial and religious interests. Thus 
we find workingmen of one race joining together to exclude 
the workingmen of another race from employment and from 
social and political recognition, frequently enabling the 
capitalist class to increase its powers of exploitation through 
using one set of workers to fight the other. Thus, too, in 
all periods of social transition we find members of the ruling 
class making common cause with the class in revolt. 

Marx calls attention to this fact in a memorable passage: 

"Finally, in times when the class struggle nears the 
decisive hour, the process of dissolution going on within the 
ruling class, in fact within the whole range of old society, 
assumes such a violent, glaring character that a small 
section of the ruling class cuts itself adrift, and joins the 
revolutionary class, the class that holds the future in its 
hands. Just as, therefore, at an earlier period, a section 
of the nobility went over to the bourgeoisie, so now a portion 
of the bourgeoisie goes over to the proletariat, and in par- 
ticular a portion of the bourgeois ideologists, who have 
raised themselves to the level of comprehending theoretically 
the historical movements as a whole. " 

It is very evident that a fair statement of the theory as 



108 ELEMENTS OF SOCIALISM 

Marx and Engels conceived it is itself a sufficient reply to 
those critics of the theory who have pointed to the fact that 
men like Robert Owen, Marx, Engels, Lassalle, and many 
others who have played an important part in the history of 
the Socialist movement itself have come from the ruling 
class. Crude statements of the theory by ill-informed ex- 
ponents may offer some excuse for such criticism, but it is 
manifestly foolish and unfair to judge any theory by the 
crudest and least capable presentation of it. 

Revisionist criticism of the theory: While the dominant 
and all-absorbing conflict in present society is that which 
goes on between the wage-paying and wage-receiving 
classes, these two groups do not constitute the whole of 
society. This is especially true in the United States which 
is still very largely an agricultural nation. We must con- 
sider the rather inchoate and ill-defined interests of the large 
so-called middle class, consisting of farmers, retail traders, 
petty manufacturers, and so on. Marx and Engels, as 
noted in an earlier chapter, regarded the imminent dis- 
appearance of this class as certain and self-evident. Assum- 
ing so much, they could ignore its existence as a transitory 
incident and present the picture of a conflict in which the 
lines are automatically fixed, or perhaps a better expression 
would be, a conflict in which an instinctive alignment of 
society takes place upon the basis of ascertainable and con- 
flicting economic interests. 

Bernstein and other Socialists of the Revisionist school 
have criticised the theory in this particular, and pointed to 
the fact that the middle class has not yet disappeared, but 
is even increasing in numerical strength through the increase 
in the number of small stockholders. Bernstein suggests 
too, that the workers cannot properly be regarded as a 
homogeneous class. Admitting that under capitalism the 
wage-workers have more common interests than conflicting 
ones, and in that sense constitute a class, he holds that the 
abolition of capitalism would at once reveal the fact that 
the proletariat consists of many diverse elements, differing 
greatly from each other, and, therefore, bound to divide 
into new classes instead of abolishing all classes as Marx 
and Engels predicted. 

Granting that Bernstein is right in criticising the assump- 



THE CLASS STRUGGLE THEORY 109 

tion in the Communist Manifesto that the workers are a 
homogeneous mass, equally devoid of property, family and 
independence, it does not follow that we must accept his 
view that the differences in needs and interests will remain 
unmodified after "the propertied and governing classes are 
removed from, or deprived of, their positions," and become 
the basis of a new arrangement of classes. The criticism fails 
in that it presupposes a sudden transformation from capital- 
ist ownership to Socialist ownership, without any serious 
modification of the position and constitution of the pro- 
letariat. 

Relation of the middle class to the proletarian struggle: 
In the acute phases of the struggle between the capitalist 
class and the proletariat, the middle class occupies a very 
unenviable position. Many of its members are struggling 
desperately to avoid sinking into the proletarian class, while 
many others are struggling out of the working class into the 
ranks of the class above. It is impossible to state with 
exactitude the attitude of this indefinite class toward the 
proletarian class in its struggle against the capitalist class. 
In general it may be said that, just as a man whose income 
is wholly or principally derived from the labor of others, 
through the ownership of the means of production and ex- 
change, is a member of the capitalist class, so a man whose 
income is wholly or principally derived from his own labor 
is a member of the working class. In general, that section 
of the middle class which depends wholly or in principal 
part upon rent, profit and interest for its maintenance will 
manifest little sympathy with the producing class in its 
struggles. On the other hand, the sympathies of that section 
of the middle class which depends primarily upon its own 
labor, and only secondarily upon rent, interest and profit, 
will, in general, manifest little sympathy with the capitalist 
class. 

The middle class is inclined to oppose the pretensions of 
the capitalist class, but at the same time little inclined to 
sympathize with the working class. It fears most of all 
the interruption of business. The members of the middle 
class as a rule would prefer to have all class conflicts cease, 
but care very little how a settlement is effected. It is from 
this class that we hear most about the "essential identity 



110 ELEMENTS OF SOCIALISM 

of interest' ' of the workers and their employers. The mem- 
bers of this vague class suffer both from high prices and the 
increasing power of the workers to demand high wages. 
They blame the "Trust" for all their major ills, and the 
"agitators" for all their minor ones. Having no well defined 
interests as a class, the middle class pursues no consistent 
policy. It sees in the manifestations of the class struggle 
little more than personal inconvenience, and does not rec- 
ognize its far-reaching significance. But with the growth 
of the great monopolies, which exploit the petty traders and 
small farmers almost as much as they exploit the wage- 
workers, though in other ways, there is a marked tendency 
on the part of a considerable proportion of the middle class 
to make common cause with the worker in the one sphere 
where such unity is possible, that of political activity. 

Expansion of the concept of class: As a result of the 
criticisms directed against the class struggle theory in its 
narrowest form, and the experience which they have gained, 
the Socialist parties of the world manifest an increasing 
tendency to expand the meaning of the term "working 
class." Wilhelm Liebknecht, the astute political leader of 
the German Social Democracy, in a paper which was post- 
humously published, wrote : "A tiny minority alone demands 
that the Socialist movement shall be limited to the wage-earn- 
ing class. . . . We ought not to ask 'Are you a wage-earner?' 
but 'Are you a Socialist?' If it is limited to the wage-earners, 
Socialism cannot conquer. If it includes all the workers and 
the moral and intellectual elite of the nation, its victory 
is certain." Liebknecht then continues to argue that the 
Social Democracy is "the party of all the people with the 
exception of two hundred thousand great proprietors, small 
proprietors, and priests." 

Class consciousness: The recognition of the existence of 
social classes, and of the interests upon which they are 
based, is what the Socialist means by "class consciousness." 
The capitalist who accepts the system as it is, and joins 
with the other members of his class to embrace every advan- 
tage which presents itself is class conscious. Likewise, 
the worker who recognizes that in the long run his interests 
are those of his class, and who joins with his fellows to obtain 
a larger share of the product of their labor, is class conscious. 



THE CLASS STRUGGLE THEORY 111 

The Socialist argues that the whole working population 
must be aroused to a recognition of their class interests. 
The victory of the capitalist class in the struggle would 
mean the destruction of democracy in a hopeless capitalist 
despotism. On the other hand, the victory of the working 
class would not result in class despotism, the substitution 
of one ruling class for another, as all previous class triumphs 
have done, but in the abolition of the conditions without 
which no class rule can exist, namely, class ownership and 
control of the things upon which society as a whole depends. 

Class consciousness does not mean class hatred: Because 
they seek to arouse the workers to a consciousness of their 
class interests, the Socialists are often bitterly condemned 
and accused of seeking to stir up class hatred. This is 
very obviously an unjust charge. Whether the class struggle 
theory be accepted or not, it is essential that it be not mis- 
represented. The Socialists do not create the class struggle. 
If we admit its existence, we must admit that it has its 
roots in economic conditions which the Socialists have not 
shaped, but which have developed in the course of centuries 
of evolution. What the Socialist does is to call attention 
to the class struggle and to the antagonism of economic 
interests which creates the struggle. By awakening the 
workers to a recognition of the class struggle and the forces 
which determine its existence, Socialism tends to divert 
the wrath and the revolt of the workers from individual 
employers to the system itself, because it compels them to 
see that the capitalist class, like their own, is a product of 
evolution, and that the individual capitalist is no more 
responsible for conditions than the individual wage-worker. 
By discouraging the idea of independent personal attack, 
and fostering belief in association upon class lines for the 
purpose of improving conditions by economic and political 
activity, Socialism has undoubtedly done much to make the 
peaceful, evolutionary solution of the labor problem possible 
through political channels. It must, therefore, be regarded 
as one of the great constructive forces of modern times. 

Organization of laborers and capitalists : With the advent 
of machine production and the development of the factory 
system, the old system of bargaining between masters and 
wage-workers assumed a new form. Under the domestic 



112 ELEMENTS OF SOCIALISM 

system there was a large degree of competition, both among 
the masters and among the wage-workers, and although 
the masters had a certain advantage of position the journey- 
man was still able to obtain a relatively large share of the 
product. The individual or corporate employer of hundreds 
of working people, on the other hand, has an overwhelming 
advantage, especially where little skill is involved and when 
labor-saving devices are being continually introduced. The 
employer can fix a wage-scale which the worker must accept 
or leave. There is no bargain. 

If, however, all or a large part of the available labor is 
organized, so that a strike against the employer's wage-scale 
will effectually close the factory, the workers can have some 
bargaining power. Labor unions appeared almost as early as 
the beginnings of capitalistic concentration and have been 
from the first bitterly opposed by the employing class. Fail- 
ing to crush the unions by legislation directed against com- 
bination, the employers themselves resorted to the organiza- 
tion of associations for the protection of their interests 
against the demands of the labor unions. Thus they were 
able to do away with a great deal of the competition in their 
own ranks for labor, which the unions had taken advantage 
of in their efforts to increase wages. The result has been 
the intensification of the class struggle. Highly organized 
associations of employers are lined up in opposition to the 
gigantic federations of labor unions, and the conflict becomes 
more and more severe from year to year. 

Thus we have a regimentation of the forces of industry 
in which industrial initiative, on both sides, is subordinated 
to the interests of the class; a manning of forces like great 
armies on the field of battle. The directive and admin- 
istrative genius of the capitalist class must not only manage 
industry itself, but must devote a large part of its attention 
to the organization and leadership of the capitalist forces 
in the class war. The directive and administrative genius 
of the working class must in like manner be devoted to the 
organization and leadership of the forces of that class. But 
unlike the leaders of the capitalist forces, the labor leaders 
have no voice in the direct management of the industrial 
processes, and are, therefore, at a big disadvantage. 

The weapons of class warfare: The first and most prim- 



THE CLASS STRUGGLE THEORY 113 

itive form of class warfare is that of physical violence. It 
is the natural expression of a feeling of outraged justice. 
The only method of struggle open to the slave of antiquity 
was that of murderous revolt. Even the early revolts against 
the capitalist system took the form of machine smashing. 
Violence is always met by violence, and the greater resources 
of the masters in every age, together with the alienation of 
public sympathy which occurs when it is resorted to, make 
an appeal to violence a very dangerous thing for the working 
class. The recognition of this fact has sometimes led em- 
ployers secretly to incite violence in order to discredit the 
workers and justify repressive measures. 

Organized labor is able to use the strike or the threat of a 
strike as a means of enforcing its terms. The capitalist 
analogue of the strike is the lockout, in which the employer 
refuses all work to the men until they agree to his terms. 
The boycott directed against the products of a particular 
establishment, or against all goods made by non-union labor, 
has as its counterpart the blacklist of the employer directed 
against the workman who has been active in asserting the 
interests of his class. The blacklist is very effective in 
checking the activity of potential union leaders. 

The capitalist control of the State enables the employers 
to call to their assistance the police and the militia, and even 
the regular army of the United States. Still more important 
is the power to bring about class legislation and, through the 
judiciary, class interpretation of the law. The power of 
the judiciary over legislation has been developed in the 
United States to a greater extent than in any other country. 
The Supreme Court may annul any law passed by Congress 
by declaring it unconstitutional, and only by the slow 
processes of death, resignation and appointment can the 
court be reconstituted and such an opinion reversed. Im- 
peachment proceedings are only possible in cases of personal 
misconduct, and even then are too cumbersome for practical 
use. Not only can the Supreme Court nullify legislation, 
but it can directly legislate by reading into a law a signif- 
icance which has been expressly rejected by Congress. These 
powers were never specifically given to the court, but the 
customs and precedents of a century have given to the 
exercise of the powers practically all the authority of constitu- 



114 ELEMENTS OF SOCIALISM 

tional sanction. The power of the judiciary is used with 
damaging effect upon the unions by means of the issuance 
of injunctions in labor disputes. Under an injunction 
directed against any or all persons involved in labor troubles 
a striker or union official can be arrested and imprisoned 
without jury trial. 

Political organization of the proletariat: To meet and 
overcome the capitalist use of the agencies of the State, 
the forces of labor in every industrial nation are being forced 
into political activity upon class lines. Class conscious 
working people are everywhere organizing into Socialist or 
Labor parties for the express purpose of gaining control of 
the machinery of the State. The capture of the State by the 
proletariat, through political education and organization of 
the workers, is the primary aim of all Socialist parties. 
With the conquest of the powers of the State by the pro- 
letariat class ownership of the means of production and 
exchange will be abolished. Then, for the first time in 
history, will true democracy, true Socialism and true indi- 
vidualism be possible. This does not mean that there will 
be a perfect human society in which no differences will 
exist. There may even be classes in a certain sense of the 
term, but not the present horizontal stratification of society. 
There may be social struggles, struggles between races and 
religions, but these are no part of the problem of Socialism, 
which concerns itself only with the next step in social 
evolution. 



THE CLASS STRUGGLE THEORY 115 



SUMMARY 

1. History has been largely a record of struggles between economic 
classes. 

2. In modern society the class struggle assumes the form of a con- 
flict between the capitalist class and the proletariat. 

3. The basis of the class divisions is a difference in source of income 
and not in the amount of income. 

4. Class consciousness is the recognition of the existence of social 
classes and of the interests on which they are based. 

5. Both great economic classes organize their forces and both use 
all the available industrial and political weapons in the prosecution 
of the struggle. 



QUESTIONS 

1. What do Socialists mean by the class struggle? 

2. What are the principal criticisms of the theory of the class struggle, 
and what are the Socialist answers to these criticisms? 

3. Why cannot the amount of individual wealth be taken as a basis 
of class division? 

4. What is meant by the middle class, and what is its relation to 
the class struggle? 

5. Explain what is meant by class consciousness. 

6. What is the social function of the employers' association? 

7. What is the place of the trade union in the class struggle? 

8. What is the purpose of the blacklist? The boycott? 



Literature 

Ghent, W. J., Mass and Class. 

Kautsky, K., The Class Struggle (Das Erfurter Program.) 
London, Jack, The War of the Classes. 
Marx, K and Engels, F., The Communist Manifesto. 
Mitchell, John, Organized Labor. 
Simons, A. M., Class Struggles in America. 

Spargo, John, Socialism, a Summary and Interpretation of Socialist 
Principles, Chap. VI. 



CHAPTER XII 

VALUE AND PRICE 

Introductory remarks : We come now to that phase of our 
subject which is the most difficult, namely, the political 
economy of Socialism in general and the much disputed 
theories of value and surplus-value in particular. Enough 
books and pamphlets have been written explaining, attack- 
ing and defending these pivotal Marxian doctrines to form 
a large library by themselves. Contrary to the old adage 
that "in a multitude of counsellors there is wisdom," the 
student is more than likely to be confused by the multitude 
of counsellors represented by this voluminous literature. 

The subject is necessarily somewhat abstract and difficult. 
To master it requires patience and perseverance together with 
at least ordinary capacity for mental perception. If the 
student has these, the most elemental requisites of sound 
scholarship, he will find that the difficulties to be mastered 
are only great enough and numerous enough to stimulate 
his intellectual ambition and energy. 

Pitfalls to be avoided: The way of the student will be 
made easier if certain common causes of confusion are fore- 
seen and avoided. One of the most common of these causes 
of confusion lies in the fact that many students and critics 
of Marx enter upon the study of his theories with precon- 
ceived mental concepts more or less clearly defined, but alto- 
gether erroneous, of which they do not divest themselves. 
With this bias as a foundation they are practically unable to 
get a mental picture of Marx's theories which is not more or 
less distorted by their preconceived errors. For example, 
the student who has read a little political economy and 
something less of Socialism has heard or read the claim made 
by some critics of Marx, such as Mr. W. H. Mallock, that 
the central idea in Socialist economics is that all wealth is 
the product of ordinary manual labor, and, therefore, ought 

116 



VALUE AND PRICE 117 

in justice to belong to the laborers. Later on he encounters 
the formula in which Marx states his proposition that the 
value of commodities is determined by the amount of socially 
necessary human labor power which they represent. If his 
mind were not already warped and biased, he would investi- 
gate the theory of which the statement quoted is the formula, 
instead of which he is very apt to regard it as a confirmation 
of the altogether absurd statement of Marx's theory made 
by his critics. To avoid this pitfall which has trapped so 
many unwary feet, it is necessary that the student should 
divest his mind of all preconceptions of the subject and begin 
his study of Marx with an open mind, as though he had never 
before heard of Marx, of wealth, of value or of labor. That 
is the only attitude compatible with sound scholarship. 

Another prolific source of error to be avoided is the unschol- 
arly habit of beginning a study in the middle, or anywhere 
else than at the beginning. This habit is one which is at all 
times to be avoided, but in the case of a thinker like Marx 
it is especially dangerous. For Marx moves with precise 
method in his reasoning, step by step. If we do not begin 
with him at the beginning and follow him closely we cannot 
hope to escape confusion and difficulty. We may think 
that we know perfectly the meaning of such terms as 
"wealth," "capital," "labor" and "value," and that we need 
not stop to consider his definitions. If that is our attitude 
we are doomed to inevitable confusion. We think of capital, 
for example, as consisting of things — "wealth used for the 
production of new wealth" — but when Marx uses the word 
he is not referring to things at all. He is referring to some- 
thing very different, namely, an abstract quality, a social 
relation between persons expressed through the medium of 
things. We shall have occasion to refer to this particular 
term at greater length hereafter; it is sufficient here and now 
to cite the one example of the confusion which must arise 
if we begin our study anywhere else than at the beginning. 

We must close this admonitory introduction with one 
other warning. The student must not attempt to divide the 
synthesis of Marxian theory and regard its parts separately. 
He must not attempt to study the theory of value as a 
thing apart from, and having no necessary connection with, 
the economic interpretation of history. If he does he will 



118 ELEMENTS OF SOCIALISM 

not only miss the most significant contribution of Marx to 
modern thought, but he will inevitably be forced to disregard 
the boundaries of the theory of value, if we may use the 
term. In other words, where Marx says that under such and 
such conditions, and only then, certain consequences result 
from certain causes, the student who does not observe the 
qualification in the statement, will find many instances 
where such consequences do not result from such causes. 
He will therefore decide that Marx \vas mistaken, instead 
of which he mistakes Marx. Where Marx said that under 
certain definite conditions A would cause Z, the student 
has supposed that A must cause Z under any conditions. 



Marx's sociological viewpoint: Political economy, or 
economics, may be defined as the science which investigates 
and explains the nature and source of wealth, and seeks to 
discover the laws which govern its production, distribution 
and exchange. In its broadest sense it also has to do with 
the regulation of man's social activities in so far as they affect 
the production, distribution and exchange of wealth. The 
science of economics, as such, is not limited to the investiga- 
tion and explanation of the phenomena of which it treats 
under any specified conditions. That is to say, it may very 
properly deal with the subject of wealth in all its aspects 
at any period of history, or in any place. 

By the opening sentence of his great work, Capital, Marx 
makes it perfectly clear that he deliberately limits himself 
to the subject of wealth production and exchange under cer- 
tain sharply defined conditions, which limitations we must 
observe in order to understand him. Calling his work an 
analysis of capitalist production, he says in the first para- 
graph: "The wealth of those societies in which the capitalist 
mode of production prevails presents itself as an immense 
accumulation of commodities, its unit being a single com- 
modity. Our investigation must therefore begin with a 
single commodity. " 

The significance of this opening paragraph for us, at 
present, lies in the fact that it makes perfectly plain the 
sociological viewpoint of Marx, and the close interrelation 



VALUE AND PRICE 119 

of his theory of social evolution and his economic theories. 
It is only in societies in which the capitalist mode of pro- 
duction prevails that wealth assumes the form of massed 
commodities. In other stages of social development wealth 
assumes other forms, but in these we are not interested, 
our purpose being simply to analyze the capitalist mode of 
production. It is obvious, therefore, that our first step must 
be to understand the nature of the unit of wealth, the single 
commodity. The familiar illustrations drawn from the life 
of Robinson Crusoe on his island, and of the "economic 
man," will not assist us, for neither has any place in a society 
characterized by the capitalist mode of production. Thus 
at the very outset we are compelled by the inexorable logic 
of Marx's method to recognize the unitary character of his 
theoretical system. It is one whole. His economic theory is 
simply the application of his general theory of historical 
development to a particular epoch, the epoch of capitalism. 

Definition of commodity: Within the capitalist stage of 
social development, then, the unit of wealth is a commodity. 
It follows, therefore, that the production of wealth must 
take the form of the production of commodities. But what 
is a commodity? Marx answers in a very lucid manner: 
a commodity must first of all be a material object which by 
its properties satisfies human wants of some sort or another. 
It makes no difference what the nature of such wants may be, 
or how they are satisfied. Whether the object satisfies a 
fundamental physical need, as food does, or merely gratifies 
our fancy and gives us pleasure, as a toy gratifies the fancy 
of a child, is unimportant. Whether it serves directly as a 
means of subsistence or indirectly as a means of production 
matters not. The essential point is that a commodity muste 
possess utility, it must be useful in the broad sense that it \ 
possesses the quality of satisfying some human need or j 
desire. This property of an object is called its use-value. 

But a thing which possesses use-value is not of necessity 
a commodity. Not all objects which possess utility can be 
called commodities. Air and light, for example, have un- 
bounded utility and are absolutely indispensable to life, but 
they are not commodities. To call sunlight a commodity, 
as Professor Nicholson does, 1 is to destroy the value of the 
1 J. S. Nicholson, Elements of Political Economy, p. 24. 



120 ELEMENTS OF SOCIALISM 

term for intelligent discussion. Air and sunshine are not 
commodities, but what the economists call "free goods." 
Even the thing which I make for my own use, which per- 
fectly satisfies some need of mine, and has very great use- 
value, is not necessarily a commodity. The question arises, 
then, what other quality than use-value must a thing 
possess to be a commodity? Marx answers that, in addition 
to being a utility, it must also possess the quality of being 
exchangeable — it must have exchange-value. A commodity, 
then, is an object which has two fundamental qualities, 
namely, the quality of being useful and the quality of being 
exchangeable for other objects. 

Exchange-value: When we say that an object has ex- 
change-value we mean that it is salable, exchangeable for 
other things. But exchange and sale are terms which refer 
to human actions, social relations between two or more per- 
sons, and not to any physical properties of the things sold 
or exchanged. The use-value of a thing, as we have seen, 
is a quality that is inherent in the object itself. The thing 
I make for the satisfaction of my own needs possesses the 
inherent quality of use-value, but if I try to sell it or to 
exchange it for something else which I desire, I find that no 
one will buy it, or take it in return for what I want. No 
one desires it. Here we have the index to the solution of 
our problem: exchange-value is a social concept. It is 
based upon desirability. In order to have exchange-value, 
a thing must have the quality of being useful to and desired 
by others than its owner. When a thing is desired by others 
we say that it has social utility, the quality of being useful to 
others. 

An object becomes a commodity, then, only when it has 
two qualities: (1) It must have utility — be capable of 
satisfying some want or desire on the part of its owner; (2) 
It must have social utility — be capable of satisfying some 
want or desire on the part of some person other than its 
owner. 

Exchange of commodities: In primitive society the pro- 
duction of wealth was carried on by individuals for their 
own use. But in modern society, industrial society, produc- 
tion is carried on by social groups principally for exchange. 
That is to say, the persons employed in a factory are not 



VALUE AND PRICE 121 

engaged in making things which they themselves, or their 
employer, desire and expect to use, but things which other 
people are assumed to desire for their use and to be willing 
to buy. So the economic life of capitalist society is concerned 
with the production of commodities and their exchange at a 
profit. That is what the Socialist means when he declares 
that under capitalism production is carried on for profit 
and not for use. 

This exchange of commodities is not carried on through 
barter. The maker of one commodity, say shoes, does 
not go to the maker of another commodity, say bread, 
and barter shoes for bread. Production and exchange are 
conducted upon too vast a scale for that. The exchange is 
carried on through the medium of one important commodity, 
money. To say that a pair of shoes will sell for so much 
money and that the money will in turn buy twenty-five 
loaves of bread is to say that one pair of shoes will exchange 
for twenty-five loaves of bread, or, in other words, that the 
exchange-values of twenty-five loaves of bread and one pair 
of shoes are equal. 

Determination of relative exchange-values: Now, the 
question arises, what is it that determines the relative ex- 
change-values of commodities? Let us suppose that pink 
parasols and wheel-barrows are selected from among the 
multitude of commodities because they happen to be approx- 
imately equal exchange-values and, at the same time, very 
much unlike each other. How shall we account for the fact 
that two commodities so dissimilar in appearance, and whose 
functions are so different, come to be exchanged upon an 
equality in the market? To be able to answer that question 
is to understand the principal economic mechanism of 
capitalist society, and that is our only objective. 

At first thought our analysis of a commodity seems to 
offer a ready solution to the problem. If a thing may be 
a use-value and yet be valueless in an economic sense, and 
if in order to have any exchange-value at all it must be a 
social use-value, then it is natural to suppose that relative 
degrees of social utility determine relative values. The 
familiar "marginal utility/ ' "final utility' ' and "supply 
and demand' ' theories of value are all based upon this 
fundamental assumption. As we shall have to discuss these 



122 ELEMENTS OF SOCIALISM 

theories later on, we need not pause to consider them here, 
except to say that the Marxian theory of value does not 
involve the assumption that relative social utility has no 
influence upon exchange-value. But, whatever influence 
relative social utility may have upon the exchange-value of 
individual commodities of the same kind, as silk hats, for 
example, it is obviously not an explanation of the relative 
values of different kinds of commodities when exchanged 
against each other. The relative social utility of the wheel- 
barrow may differ from the relative social utility of the 
parasol quite as much as the two commodities differ in 
physical appearance and in function. We may introduce a 
third commodity, differing equally from both the others, 
alike in general characteristics and in relative social utility 
— a pair of spectacles, for instance — and find that it exchanges 
for either of the others upon a basis of equality. 

Views of the pre-Marxian economists : If at this stage we 
pause to analyze any number of commodities, we shall find 
that when we have carefully observed and noted all their 
differences they have at least one quality in common. They 
may differ in size, shape, weight, color, texture, function, 
simple utility, social utility, in short, in every respect except 
one — they are all products of human labor, or, as Marx 
would say, crystallizations of human labor-power. It is 
an axiom of political economy that all wealth is the result 
of an application of human energies to natural resources, 
and every unit of wealth is, therefore, an embodiment of 
labor-power. Here, then, say the Socialists, we have at 
least a hint of the solution of the great problem which lies 
at the heart of the system of exchange in capitalist society. 
The amount of labor-power represented by these various 
commodities is in some manner connected with their relative 
values. So far, no modern economist will disagree. That 
there is some relation between the labor spent in producing 
economic goods and their value is universally admitted. 

Most of the great economists before Marx held the view 
that the relative value of commodities to one another is 
determined by the relative amounts of human labor-power 
consumed in their production. With slight variations, this 
theory was held by nearly all the great economists from Sir 
William Petty in the seventeenth century to John Stuart Mill 



VALUE AND PRICE 123 

in the latter half of the nineteenth century. A few citations 
upon this point must suffice: 

Petty's view: Sir William Petty takes silver and corn for 
comparison: 

"If a man can bring to London an ounce of silver out of 
the earth in Peru in the same time that he can produce a 
bushel of corn, then one is the natural price of the other; 
now, if by reason of new and more easy mines a man can 
get two ounces of silver as easily as formerly he did one, 
then the corn will be as cheap at ten shillings a bushel as 
it was before at five shillings a bushel, cceteris paribus" l 

Adam Smith's view: Adam Smith, in his Wealth of 
Nations, takes the same view: 

"The real price of everything, what everything really costs 
to the man who wants to acquire it, is the toil and trouble 
of acquiring it. What everything is really worth to the man 
who has acquired it, and who wants to dispose of it or 
exchange it for something else, is the toil and labor which it 
can save to himself, and which it can impose on other people. 
. . . Labor was the first price, the original purchase money, 
that was paid for all things. ... If among a nation of 
hunters, for example, it usually costs twice the labor to 
kill a beaver which it does to kill a deer, one beaver would 
naturally be worth or exchange for two deer. It is natural 
that what is usually the produce of two days' or two hours' 
labor, should be worth double of what is usually the produce 
of one day's or one hour's labor." 2 

Ricardo's view: "To convince ourselves that this (quan- 
tity of labor) is the real foundation of exchangeable value, 
let us suppose any improvement to be made in the means 
of abridging labor in any one of the various processes through 
which the raw cotton must pass before the manufactured 
stockings come to the market to be exchanged for other 
things; and observe the effects which will follow. If fewer 
men were required to cultivate the raw cotton, or if fewer 
sailors were employed in navigating, or shipwrights in con- 
structing the ship in which it was conveyed to us; if fewer 
hands were employed in raising the buildings and machinery, 

1 William Petty, A Treatise on Taxes and Constitutions (1662), pp. 
31-32. 

2 Adam Smith, The Wealth of Nations, Vol. I, chaps, v-vi. 



124 ELEMENTS OF SOCIALISM 

or if these, when raised, were rendered more efficient; the 
stockings would inevitably fall in value, and command less 
of other things. They would fall because a less quantity 
of labor was necessary to their production, and would there- 
fore exchange for a smaller quantity of those things in which 
no such abridgment of labor had been made." l 

John Stuart Mill's view: John Stuart Mill is less definite 
than Ricardo, but he says that "Every commodity of which 
the supply can be indefinitely increased by labor and capital, 
exchanges for other things proportionately to the cost neces- 
sary for producing and bringing to the market the most 
costly portion of the supply required." 2 Elsewhere he says 
that of the component elements of cost of production, "the 
principal of them, and so much the principal as to be nearly 
the sole, we found to be labor." 3 

Meaning of the labor theory of value : It would be exceed- 
ingly disingenous to suggest that all these great economists 4 
regarded all labor as being of equal value, and considered the 
labor of an unskilled laborer to be equally as valuable, hour 
for hour, as that of a highly skilled artisan. It would be 
equally disingenuous to suggest that in the term "labor" 
they included nothing but ordinary manual labor, or that 
they held the labor value theory in the absolute sense as 
meaning that if a good workman made two coats in the same 
time as it took a poor workman to make one coat, the two 
coats would only equal the one in value. While it is not 
always made as clear as it might be, it is evident that in 

1 David Ricardo, Principles of Political Economy and Taxation, 
chap, i, § iii. 

2 J. S. Mill, Principles of Political Economy, Book II, chap. vi. 

3 Idem, Book III, chap. iv. 

4 To the list of authors quoted might well be added the names of 
Benjamin Franklin and Henry Charles Carey, two of the most original 
of our early American economists. Franklin regarded trade as being 
" nothing but the exchange of labor for labor, the value of all things 
being most justly measured by labor." (Remarks and Facts Relative 
to the American Paper Money [1764], p. 267.) Carey went even 
further, and contended that the value of all commodities, and even 
of land, is determined by the labor necessary, under present conditions, 
to reproduce the commodity, or, in the case of land, the labor necessary 
to bring new land to the same stage of productiveness. See his Prin- 
ciples <>f Political Economy (1838-1840). Carey is in many respects 
worthy of much more consideration than he has ever received at the 
hands of his own countrymen. 



VALUE AND PRICE 125 

saying that the value of commodities is determined by the 
labor spent in their production they were referring to an 
average process, a general rule, not to its manifestation in 
particular individual commodities. It is also evident that 
they were referring to average labor, that is, labor of average 
skill and productivity. Finally, it is evident that, with rare 
exceptions, the economists who accepted the theory that the 
basis of the value of commodities is the labor crystallized 
in them meant social labor, rather than the labor of particular 
individuals or sets of individuals. Thus, when Ricardo, in 
the passage already quoted, refers to quantity of labor, 
he includes not merely the labor of those immediately con- 
cerned in making stockings, but all the indirect labor, even 
to the building of the ships in which the raw cotton is 
transported. 

Marx and the labor theory of value : Marx further devel- 
oped the concept of social labor as the basis and measure of 
value. He saw that machine production had made it 
impossible to measure exactly the labor spent in the produc- 
tion of any single commodity. He recognized the futility 
of making any attempt to do anything of the kind. If we 
take even a very simple article made by hand labor, it is 
practically impossible to determine the amount of social 
labor it embodies. Let us consider an ordinary table: even 
if we could measure the individual labor spent in felling the 
tree and sawing it into the boards of which the table was 
made, and the labor of the man who made the table itself, 
we could not measure the share of the social labor expended 
in making the tools used, the labor of the tool-makers and, 
before them, the coal and iron miners. We could not measure 
what share of the total volume of labor spent in constructing 
the railroads over which the lumber was hauled is repre- 
sented in the table. When we pass from such simple hand 
labor to the complex machine production of modern indus- 
try, it at once becomes apparent that no human intellect 
could ever calculate the amount of social labor contained 
in any given commodity, and that in the actual process of 
exchanging commodities in every-day life there can be no 
calculation of the relative labor content of individual com- 
modities by individual purchasers and vendors. When we 
go into the market to buy goods we do not make a mental 



126 ELEMENTS OF SOCIALISM 

calculation and as a result refuse to pay as much for one 
article as for another upon the ground that it required less 
social labor to produce it, and that it is therefore of less value. 
If the value of commodities is determined by the social labor 
expended in their production, the law must be a general one, 
applying to the system of production and exchange as a 
whole, rather than to individual commodities, and it must 
operate automatically, as it were. 

This is, in fact, exactly what Marx claims. Setting out to 
discover the general law of value in capitalist society, the 
principle which determines the value of masses of products 
against other masses of products, and of dissimilar products 
against each other, rather than the value of unit commodities 
against other units of the same kind, he concludes that the 
value of commodities, as a rule, is determined by the amount 
of socially necessary human labor power represented by 
them. In other words, the value of commodities is deter- 
mined by the amount of social labor necessary, on an average, 
under the conditions existing at a given time and place, 
to reproduce them. This is not determined absolutely, 
in individual cases, but approximately in general, by the 
bargaining and higgling of the market, to adopt a phrase 
used by Adam Smith. 

II 

Misdirected criticisms of the theory: With the theory 
thus delimited, we are in a position to consider some of the 
criticisms of it which have been made by non-Socialist 
economists. 

(a) As to "unique values 17 : One of the most common 
criticisms of the Marxian theory of value assumes its applica- 
tion to every article of value, and ignores the fact that, as 
we have seen, Marx specifically limits its application in such 
a manner as to exclude a large number of such articles. Let 
us consider, for example, the category of what modern econ- 
omists call "unique values" or "scarcity values," articles 
which owe their value to their extreme scarcity, which can- 
not be reproduced by labor, and the value of which is ob- 
viously independent of the amount of labor which was origi- 
nally necessary to produce them. To this category belong 



VALUE AND PRICE 127 

such articles as great auk's eggs, rare postage stamps, auto- 
graph letters, rare manuscripts and other articles associated 
with great personages and events — such as Napoleon's snuff- 
box, Oliver Cromwell's sword, or the mummy of Rameses. 

We need only to consider the terms in which Marx formu- 
lates his theory to see the irrelevance of all that criticism 
which argues that, because such unique values cannot be 
accounted for on the basis of the labor spent in their pro- 
duction, the labor theory of value must be defective. As 
an explanation of all values of every kind it may be admitted 
that the theory is not all-inclusive. But that is judging it 
upon a wrong basis, and differs only in the degree of its 
stupidity from condemning the theory because it does not 
explain how the circle may be squared. Such articles are 
not reproducible by labor, that is to say, no possible amount 
of human labor could reproduce the exact utilities in them. 
Napoleon's snuff-box or Cromwell's sword might be exactly 
duplicated as regards their physical properties, but the 
special quality which gives them their great value, their 
association with the great historical personages to whom 
they once belonged, is not reproducible. A morbid collector 
might be willing to give a fortune for an authenticated tooth 
of Julius Caesar, but that fact would not in any manner 
tend to weaken the Marxian theory of value. That theory 
deals with the system of production and exchange prevalent 
"in those societies in which the capitalist mode of production 
prevails" and the production of Napoleon's snuff-boxes, 
Shakespearian folios, great auks' eggs and Caxton books is 
not a part of that system. 

But let us consider "scarcity values" of another kind. 
A man walking across the desert picks up a diamond, then 
another, and yet again another. The exertions of a few min- 
utes have given him diamonds valued at thousands of dollars. 
How is the value of the diamonds determined? Surely not 
by the labor which was spent in picking them up. That 
much is self-evident, and those critics of the Marxian the- 
ory who, like Bohm-Bawerk, suppose meteoric lumps of 
gold falling to earth and being picked up, and imagine that 
the theory can be thus easily disposed of, overlook its 
central idea. In the case of the diamonds, their value is 
determined by the amount of social labor necessary, on an 



128 ELEMENTS OF SOCIALISM 

average, to reproduce them, that is, to secure an equal num- 
ber of carats of equal purity. If diamonds could be normally 
obtained so easily their value would fall to zero: they would 
become what the economists call "disutilities." So in the 
case of Professor Bohm-Bawerk's imaginary lump of meteoric 
gold: if gold usually fell from the heavens in big lumps, 
so that all we needed to do to secure a sufficient supply was 
to go and gather the lumps, the value of gold would be deter- 
mined by the amount of labor necessary, on an average, to 
gather it up. The value of gold might then fall below that 
of coal or iron. 

(&) The meaning of "labor": What do we mean by 
"labor"? One of Marx's critics, Mr. W. H. Mallock, who 
criticises the definition of labor which Marx gives, himself 
defines it as "the faculties of an individual applied to his 
own labor," 1 as distinguished from "ability," which consists 
of the intellectual faculty of direction applied to the superin- 
tendence and direction of the manual labor of other people. 
Against this silly jumble of words, which means nothing, 
let us set the luminous and lucid definition of Marx: "By 
labor power or capacity for labor is to be understood all 
those mental and physical qualities existing in a human being 
which he exercises when he produces a use-value of any 
description." 2 In the light of this definition it becomes 
very evident that all the numerous criticisms which rest 
upon the assumption that Marx regarded only ordinary 
manual labor as creating value fall of their own weight. 
Like all other economists, Marx includes in his concept of 
labor every form of productive effort, mental as well as 
physical. 

The meaning of the term "socially necessary human 
labor" which Marx uses may be more easily expressed by 
the term abstract labor. It must be confessed that this is 
somewhat difficult to comprehend. It is easy to see that, 
because the word labor may be equally applied to simple, 
unskilled manual labor and to labor which is highly skilled 
and specialized, any theory which makes labor the determi- 
nant of value must lead to difficulty and confusion unless 

1 Socialism, by W. H. Mallock, M.A., of England, The National Civic 
Federation, New York, p. 36. 

2 Capital, by Karl Marx (Kerr edition), Vol. I., p. 186. 



VALUE AND PRICE 129 

some means is employed whereby all labor is reduced to one 
common denominator. This Marx does by reducing all 
kinds of labor to simple, abstract labor. 

In other words, Marx regards highly skilled labor as so 
much ordinary unskilled labor multiplied. An hour of 
skilled labor contains several hours of simple, unskilled labor, 
for we must somehow and somewhere reckon the social labor 
spent in acquiring the skill. This reduction of superior 
labor to average, unskilled labor appears to be purely 
arbitrary, and makes labor as abstract a term as value. It 
is true that average unskilled labor varies greatly in char- 
acter in different countries at different times, but in a given 
society it is as stable as anything human can be. But while 
this reduction of all labor to terms of average unskilled labor 
appears to be purely arbitrary, in reality it is only a theo- 
retical formulation of an empirical law of every-day life. The 
reduction of all forms of labor to one common form or 
standard is made every day in actual exchange. Commodi- 
ties varying greatly are uniformly valued in money. But 
money itself is a commodity, and the exchange through its 
medium of other commodities which are the products of 
many different kinds of labor, implies the ultimate reduction 
of the value of all to the value-basis of one. This process, 
too, like the determination of value itself, is not the result 
of conscious effort on the part of individuals or of society, 
but goes on unconsciously and indirectly, through the 
higgling of the market. There is not, and cannot be, any 
absolute measure of value. All value is relative — the value 
of commodities being measured by other commodities. 
Neither is there any absolute measure of the labor time 
contained in commodities. All that Marx claims is that 
by a social process, namely exchange, the ratio of which is 
determined by the higgling of the market, all forms of labor 
are ultimately expressed in, and therefore measured by, 
simple human labor. 

(c) Productive ability: It is sometimes urged that the 
Marxian theory of value is deficient in that it excludes, or 
at least does not duly regard, directive or managerial ability. 
It is only necessary here to point out that in so far as this 
directive ability is productive in any sense it is clearly 
comprehended by the definition of labor which Marx gives, 



130 ELEMENTS OF SOCIALISM 

and which we have already quoted. So far as the claim is 
made that profits are really nothing more than proper 
rewards for the exercise of such directive ability, we shall 
consider it under Surplus- Value. 

The price-form (or price-expression) of value: In con- 
sidering the nature of commodities we saw that in order to 
be a commodity an article must have two characteristics: 
it must be a useful object — using that term now in its 
ordinary, non-technical sense — and satisfy some need of a 
particular individual, and it must be an exchangeable 
object, having a social use-value. The usefulness of an 
object to its owner, using the term "usefulness" as before, 
may be said to be its value in its natural form, while its 
exchangeability may be said to be its value in social form. 
It is only the latter form of value which the science of eco- 
nomics considers. The simple utility of an object may be 
considered and estimated by itself, without regard to other 
objects, but not so its exchange-value. If we take a barrel 
of flour we can at once perceive its simple utility. So many 
loaves of bread can be made from it, which will provide 
us with food for so many days. To ascertain this we do not 
need to compare it with any other object. But if we desire 
to estimate its value in an economic sense, its worth, we 
are compelled to consider, not its inherent qualities, but 
its relation to other objects. 

Considered as economic values, all commodities are con- 
crete expressions of human labor. This common quality 
makes them exchangeable against each other. But the 
direct exchange of commodities is not a practicable way of 
carrying on the exchange relations of modern society. So 
all commodities are exchanged through the medium of one 
commodity, called money. Thus, the value of all commod- 
ities is expressed in quantitative terms of the medium of 
exchange, that is, in amounts of money. If commodities 
were exchanged for each other by means of direct barter, 
it would be found that some commodities would exchange 
equally for some other commodities, because they happened 
to represent equal amounts of socially necessary human labor. 
Thus, a bushel of wheat and a yard of linen might be equal 
values. Other commodities, representing unequal amounts of 
socially necessary labor, would be exchangeable according to 



VALUE AND PRICE 131 

their relative social labor content. A yard of silk, for 
example, might be worth five yards of linen and a ton of 
coal worth two yards of silk. 

Money : Let us suppose that it was desired to adopt some 
one of the foregoing commodities as a standard of value, by 
which the value of the others might be measured and through 
which they might be exchanged. The commodity so chosen 
would become money, and the system of exchange would 
become a system of money economy. If we look over the 
list of commodities and consider their special characteristics 
we shall note at once that two of them, wheat and coal, 
are too bulky to serve conveniently as media of exchange. 
It would not be convenient to transfer such bulky payments 
as five tons of coal or fifty bushels of wheat each time ten 
yards of silk changed hands. Linen would be a far better 
medium. In case it was selected it would be money and the 
value of the other commodities would be expressed in yards 
of linen. 

In various times and places hides, salt, shells, wheat, 
powder, tobacco, and a multitude of other things have served 
as money. But for various reasons the precious metals, 
gold and silver, have been most favored by trading nations. 
How did gold come to be chosen as the standard of value 
by most of the great modern nations? Because gold was 
relatively rare and it required a large amount of labor, on 
an average, to procure a small quantity of it; a very small 
piece had a very high value as compared with, say, iron. 
This made it admirable as a medium of exchange for the 
reason that a large value in gold could be carried or stored 
away more easily than an equal value in a bulkier commod- 
ity. Thus, before its advantages caused its selection as the 
value-measure of commerce, gold was a commodity like 
all other commodities, subject to the same laws. Even now 
all gold is not money, and such part of the gold supply of 
the world as is not money is subject to the same laws as 
all other commodities, subject, of course, to the qualification 
that the monetization of gold protects it and gives it a 
measure of monopoly-value. 

Relation of price to value : Before we can exchange goods 
through the medium of money we must somehow reduce the 
value of the goods to money terms. Value has no corporeal 



132 ELEMENTS OF SOCIALISM 

existence, that is, no existence apart from the comparison 
of things with each other. It is an abstraction. When we 
express the value of a given commodity in money terms, 
we really measure it first of all in money, and, through 
money, in other commodities. This measure of value we 
call price. Although some economists use "price" and 
"value' ' as interchangeable terms, they are not synonymous 
and should not be so used. They are closely related but 
not identical. If value were an absolute thing an absolutely 
perfect price-form would be identical with the value. Neither 
of these conditions exists, however, and, as an approxima- 
tion of value, price is subject to many fluctuations. In a 
free market, prices sometimes fall below and sometimes rise 
above values. If we conceive value as production cost plus 
average profit we shall be able to understand this more 
clearly. The production cost of commodity A and com- 
modity B being equal, their values are equal. But in actual 
trade A may, for some time, sell for either more or less than 
B. In a free market — and of such Marx wrote — this is a 
result of the relation of supply and demand to each other 
with regard to the commodity affected. 

If the supply of commodity A greatly exceeds the demand 
for it, the price will naturally fall. If the demand greatly 
exceeds the supply, on the other hand, the price will rise. 
In the case of commodity B there may be a more perfect 
equilibrium between supply and demand, so that its price 
remains stable and closely approximates its real value. Thus, 
we have the phenomenon of equal values selling at unequal 
prices. But we must not forget that the unequal prices do 
represent equal values. That this is the case we can easily 
ascertain by watching closely the effect of supply and demand 
upon prices, and noting how narrowly it is bounded by 
value. Over-supply causes a depreciation of prices. But 
presently supply slackens. Producers will not continue 
production at their usual rate of speed unless they can get a 
price approximately equal to the value of their commodity. 
As a result of the diminished supply, prices rise. Or again, 
prices are soaring as a consequence of an insufficient supply. 
Demand is brisk, but supply is slow and sluggish. Presently, 
there is a perceptible slackening of demand, or a perceptible 
stimulation of supply, or both. Prices fall in consequence. 



VALUE AND PRICE 133 

It is not denied, therefore, that the relation of supply to 
demand has a very important effect upon trade, that it 
causes many of the commercial crises through fluctuations 
of prices. AH that is claimed is that it is not the determinant 
of value, and that it is value, as such, which sets the limits 
to the influence of supply and demand upon prices. 

The "marginal utility" theory: As a theory of value, the 
so-called "Austrian" theory of final or marginal utility does 
not differ, except in the form of its expression, from the 
old supply and demand theory. All that we have said of 
the latter theory applies to it. According to this theory, 
the value of anything is determined by our estimate of its 
capacity to satisfy the wants of ourselves or others, in other 
words, by its desirability — to quote Jevons — or the degree 
of its social utility. To say that the value of an object is 
determined by its power to give satisfaction, as Menger, 
Jevons and others do, and to say that it is determined by 
the amount of labor socially necessary for its production, 
as Marx does, appears to involve a violent contradic- 
tion. 

But if Menger and Jevons really mean by value what 
Marx means by price, and not what he means by value, the 
contradiction disappears. On the other hand, if we assume 
that Menger and Jevons are not referring to price but to 
value, and find that they admit that the influence of marginal 
utility, is like that of supply and demand, ultimately bounded 
by the amount of social labor, while Marx admits the 
influence of marginal utility in that sense — that is, upon the 
price-form of value rather than upon value itself — the 
violent contradiction also disappears. Among the Socialist 
writers of to-day there is an increasing tendency to regard 
the Marxian theory of value as including the marginal utility 
theory. 

Propositions to be established: It is our present purpose 
to attempt to establish two propositions. They are (1) that 
the marginal utility theory of value is the supply and demand 
theory under another name; (2) that Marx's theory of value 
definitely includes all that is important in the theory of 
marginal utility. In order that we may not misunderstand, 
or misstate the theory, we will adopt the statement of it 
made by Professor Seligman, one of its leading exponents, 



134 ELEMENTS OF SOCIALISM 

italicizing a few passages in order to attract special attention 
to them: 

"If a starving wayfarer suddenly spies an apple, it will have a supreme 
utility for him^because it stands between him and death. If he finds 
a second apple, it will still be welcome, but it will fill a somewhat less 
intense want. With every additional apple his appetite will be more 
appeased, until with, let us say, the tenth apple he will reach the point 
of satiety and be on the margin of doubt whether to consume any more. 
The utility of each apple — its capacity to satisfy his desire — has dimin- 
ished until the tenth apple is the last which affords any utility at the 
moment. The utility of this tenth apple is called final because it is 
the final apple, or marginal because on the margin of desire. 

"It is plain that the marginal utility of any apple depends on the 
quantity at one's disposal. The greater the quantity, the less keenly 
will he feel the particular want. If he had only five apples, the marginal 
utility of the fifth would be considerable because his last want satisfied 
would still be urgent. The degree of marginal utility depends on the 
strength of the want last satisfied, or, it might be said, on the urgency 
of the next satisfied want. 

"The second point to be noted is that at any given time the utility 
of each apple is equal to that of the la t and therefore to that of any 
other (of the same size and quality). If the available supply is five 
apples, any one of the five apples may be considered the final or marginal 
unit, that is, the last unit in point of time. The wayfarer will lay his 
hands on any one of the five without particular choice; whether he be- 
gins with one or with another is immaterial, because he knows that one 
is as good as another. 

"Thirdly, in estimating the utility of the entire supply of apples, 
we must distinguish between the total utility and the marginal utility 
of the stock. The total utility of a stock is obtained by adding the 
utility of each additional apple to that of its predecessor. It will ac- 
cordingly grow until the point of satiety has been reached. Ten apples 
possess more total utility than five. The marginal utility of the stock, 
however, is always equal to the marginal utility of the final unit multi- 
plied by the number of units. The marginal utility of two apples will 
be twice that of the second, of four apples, four times that of the fourth. 
Here, as before, the marginal utility of the stock will increase, but not 
up to the point of satiety. After a limit has been reached, the marginal 
utility of a stock begins to decline. The marginal utility of eight apples 
may be less than that of five, even though the total utility is undoubt- 
edly more. 

"... When we speak of the marginal use of a commodity to any one, we 
think of him as on the brink of not wanting any more. He may reach 
the margin because, with the diminishing utility of each increment, he will, 
if tfie supply is large enough, come to the point where there will be no 
consciousness of any economic value at ally 1 

Proposition I: Professor Seligman's statement of the 
theory is very lucid and simple. From it we gather that the 
1 E. R. A. Seligman, Principles of .Economics (1905) pp. 177-178. 



VALUE AND PRICE. 135 

marginal utility of commodities is inversely proportionate to 
the quantity available. If there were only one apple, the 
starving wayfarer would be willing to give all he possessed 
to secure it. Having consumed it and nine others, he is 
willing to take a tenth, but is so near the point of satiety 
that he will give little or nothing for it. Offer him a hundred 
more and he will spurn them. He does not want them; they 
are not utilities now, but disutilities. What is this indeed 
but the supply and demand theory? 

Instead of a hungry wayfarer, let us take a whole com- 
munity. Apples being very scarce command high prices. 
There is a large effective demand for them. For every apple 
there are ten bidders. Now, some enterprising dealer, 
hearing of the good market for apples, brings in a hundred 
bushels and offers them for sale. The price he gets, while 
still high, is less than the price which apples brought before 
when there were ten bidders for every apple. Now a second 
dealer appears with a thousand bushels, so that there are 
more than enough apples to satisfy the demand, and, in 
consequence, apples fall in price. In the language of the 
final utility theory, their degree of utility has decreased 
as the quantity available has increased. If a third dealer 
should bring in a thousand bushels more, it would be impos- 
sible to give the apples away, perhaps. They would be 
valueless, or, in Professor Seligman's words, "the utility 
is zero and the commodity is no longer an economic 
good." 

Jevons, to whom more than to any other economist of the 
English-speaking world, the development of the theory is 
due, admits that the final degree of utility "varies with the 
quantity of commodity, and ultimately decreases as that quantity 
increases." 1 Oddly enough, he chooses for an illustration 
of his theory exactly the same example as Lord Lauderdale 
chose in 1804 to illustrate his theory of the dependence of 
value upon the interaction of demand and scarcity, and his 
reasoning is the same. Says Lauderdale: "Water ... is 
one of the things most useful to man, yet it seldom possesses 
any value; and the reason of this is evident; it rarely occurs 
that to its quality of utility is added the circumstance 
of existing in scarcity; but if, in the course of a siege, or 

1 W. S. Jevons, The Theory of Political Economy, p. 62. 



136 ELEMENTS OF SOCIALISM 

a sea-voyage, it becomes scarce, it instantly acquires 
value." 1 

Compare this with Jevons: "We cannot live a day without 
water, and yet in ordinary circumstances we set no value on 
it. Why is this? Simply because we usually have so much 
of it that its final degree of utility is reduced nearly to zero. 
. . . Let the supply run short by drought, and we begin to 
feel the higher degree of utility, of which we think but little 
at other times." 2 

Unless we are to revolutionize the English language and 
change its entire vocabulary, these citations must be regarded 
as sufficiently proving our first proposition, namely, that 
the marginal or final utility theory of value is, fundamentally, 
the same as the supply and demand theory of an earlier 
generation of economists. As such, it is subject to the limita- 
tions set for it by the nature of value itself. Marginal 
utility does not confer value upon the masses of commodities 
the exchange of which constitutes the trade of capitalist 
society, however much it may affect the realization of the 
value in price form of any particular commodity at any given 
time or place. This is the essential point to be made against 
the theory as a theory of value. That considered as a state- 
ment of the influence of relative scarcity or abundance upon 
prices it is in some respects superior to the older formulations 
of the same principle, and more useful as an explanation 
of particular price movements, may be granted by the most 
orthodox Marxist. 

Proposition II : Our second proposition, that the Marxian 
theory of value includes all that is important in the marginal 
utility theory, can, we believe, be easily established. We 
accept as our initial premise the conclusion arrived at as a 
result of the consideration of our first proposition, namely, 
that the marginal utility theory is of importance only as a 
statement of the main cause of price fluctuations in a state 
of free competition. Now, Marx never at any time denied 
the influence of relative scarcity and abundance upon prices. 
On the contrary, his whole theory involves recognition of 
the fact that the interaction of supply and demand — or as 

1 Lauderdale, An Inquiry into the Nature and Origin of Public Wealth, 
p. 16 
'Jevons, op. cit., p. 62. 



VALUE AND PRICE 137 

we may now say, the degree of utility — regulates "the tem- 
porary fluctuations of market prices." 1 His explanation of 
the manner in which the "higgling of the market" fixes 
the ratio of exchange between different commodities may be 
cited in proof of the fact that he gives it full recognition. 
But what Marx does is to point out the limitations of this 
influence, imposed upon it by value itself. When supply 
and demand are equal, prices are said to represent "true 
value," or "pure value." Under such conditions, when 
supply and demand balance each other, what creates value t 

Nor is Marx blind, as Bohm-Bawerk and his followers 
allege, to the varying degrees of utility. His theory rests 
upon the fundamental assumption that value is inseparable 
from social utility as distinguished from mere usefulness. 
The most useful thing, inherently considered, for which 
there is no effective demand can have no value, no matter 
how much labor has been consumed in its production. All 
his reasoning implies a recognition not only of general social 
utility, but of relative social utility. When he uses the term 
"socially necessary labor" it is not merely "average" labor 
that he refers to. A commodity may have been produced 
in the average labor time, but if that time was not spent 
for a "socially necessary" purpose, that is, if the commodity 
itself was not socially necessary, it would be wrong to speak 
of the commodity as embodying so much socially necessary 
labor. If a man in the tropics makes snowshoes, even though 
he makes them with average speed and skill, the snowshoes 
will not be the embodiment of "socially necessary labor" 
any more than they themselves will be socially necessary. 
If a trader takes a lot of panama hats to the arctic circle 
the hats will have no value, even though each one consumed 
in the making an average amount of labor, time and skill. 
The reason is obvious: there is no demand for the hats — 
they are not socially necessary, and, therefore, are valueless. 
It is a very puerile criticism to point to the fact that the 
hats are so many "embodiments of human labor," and to cite 
the illustration as a "refutation" of Marx's theory. In the 
first place, the hats themselves do not conform to the 
fundamental requirement of the theory that commodities 
must be social use-values. In the second place, the labor 

Walue, Price and Profit, by Karl Marx, p. 24. 



138 ELEMENTS OF SOCIALISM 

embodied in the socially unnecessary hats cannot, in that 
time and place, be considered as "socially necessary labor.' ' 
The term as Marx uses it is an extension of his concept of 
social use-value to the labor spent upon the production of 
an object. It is therefore quite evident that Marx never 
loses sight of the factor of relative utility. All that the theory 
of supply and demand, and its modern statement the theory 
of final utility offers is a mode of explaining the fluctuations 
of prices around the norm of value. And that is included in 
the Marxian theory. 

Jevons' admission: On the other hand, it remains to be 
said that the claim here set forth of the limitations of the 
marginal utility theories, under whatever name they may 
be put forth, has been substantially admitted by no less an 
authority than Professor Jevons himself. It is admitted 
by Jevons that the final utility of commodities is not, in 
actual practice, determined independently of the labor neces- 
sary for their production. He says in one passage of his 
celebrated work that his theory of final utility "leads directly 
to the well-known law, as stated in the ordinary language of 
economists, that value is proportional to the cost of pro- 
duction." 1 He rests his whole logical structure ultimately 
upon labor, making it the final determinant of value. His 
argument is as follows: 

(A) The cost of production determines supply. 

(B) Supply determines final degree of utility. 

(C) Final degree of utility determines value. 

If A, cost of production, determines B, degree of utility, 
and C is in turn caused by B, is not A the ultimate cause of 
C? The greater contains the lesser, and the Marxian theory 
of value contains all that there is of value in the theory of 
marginal utility. 

Monopoly-price: In view of the foregoing, it is only 
necessary to refer briefly to the subject of monopoly-price. 
When we discuss the subject of value and price we assume 
free market conditions. Under such conditions prices may 
for a time rise above or fall below values, but sooner or later 
the equilibrium of the two forces will be restored and prices 
will approximate values. Where monopoly or near-monopoly 
exists, we have to reckon* with a new factor, the artificial 

X W. S. Jevons, The Theory of Political Economy, 3rd ed., p. 186. 



VALUE AND PRICE 139 

elevation of prices above value — virtually an abrogation of 
the law of value. The development of great monopolies and 
near-monopolies has greatly increased the number of com- 
modities which, for considerable periods, are placed outside 
of the sphere of the labor theory of value, their price being -* 
determined solely by the desire of the buyers on the one 
hand, and, on the other hand, the power of the sellers to 
control the supply. 



140 ELEMENTS OF SOCIALISM 

SUMMARY 

1. Marx maintains throughout his work a sociological point of 
view, and discusses production only under the social conditions of 
capitalism. 

2. An object is a commodity and has exchange-value only when it 
possesses social utility. 

3. The relative exchange-values of commodities are determined by 
the average amount of socially necessary human labor needed to re- 
produce them at a given time and place. 

4. The price of a commodity fluctuates about its value in response 
to the interaction of supply and demand. 

5. There is no essential difference between the marginal utility 
theory of value and the supply and demand theory; and the Marxian 
theory definitely includes all the important features of other theories 
of value. 

QUESTIONS 

1. How does Marx define Labor? 

2. What are the limits of Marx's study of economic production? 

3. What is a commodity? 

4. What, according to Marx, determines relative exchange-value? 

5. How does this position compare with the view of Petty? Of 
Adam Smith? Of Ricardo? Of J. S. Mill? 

6. How are unique values determined? 

7. Explain how the labor theory can be applied to the determination 
of the value of diamonds? 

8. Explain the concept of abstract labor. 

9. What is meant by price? How is it determined? 

10. What is the difference between price and value? 



Literature 

Boudin, L. B., The Theoretical System of Karl Marx. 

Deville, G., The People's Marx. 

Hyndman, H. M., The Economics of Socialism. 

Marx, Karl, Capital (especially Vol. I.). A Contribution to the 
Critique of Political Economy. Wage Labor and Capital. Value, Price 
and Profit. 

Spargo, John, Socialism, a Summary and Interpretation of Socialist 
Principles, Chap. VII and VIII. 



CHAPTER XIII 

SURPLUS-VALUE 

Introductory: We have already noted the fact that the 
form of industrial society in which we live, and which we 
call capitalism, is characterized by the production and 
exchange of commodities or wares, salable goods. The sole 
motive of capitalist enterprise is the sale of goods at a profit. 
So long as the capitalist can obtain a satisfactory profit he 
does not care — except in rare instances, which need not be 
considered — what kind of commodities he deals in. If a 
greater profit can be obtained from the manufacture and 
sale of shoddy clothing than from the manufacture and sale 
of good clothing he will, so far as he is free to do so, concern 
himself with the former. This is too obvious a fact to require 
demonstration. It is one of the commonplace expressions 
of every-day life that men are in business "for the profit 
there is in it." This is not a moral criticism of capitalist 
society, but a simple recognition of one of its essential and 
characteristic features. 

The objective of capitalist production being the realiza- 
tion of profit, it follows that if our analysis of capitalist 
society is comprehensive and helpful we must learn a good 
deal about profit, its nature, its origin and its function in 
the social organism. Marx's theory of surplus-value is an 
explanation of these phenomena. 

Exchange of equal values : In our discussion of value and 
its price-form we saw that the exchange of commodities 
takes place through the medium of money, itself a commodity. 
We are now to consider the process of exchange itself. That 
somehow or other profits are realized through the exchange 
of commodities is evident, but that does not mean that the 
proportion of the total of existent values which we call 
profit is created by exchange. On the contrary, it is very 
easily seen that it is not. If two men, A and B, exchange 

141 



142 ELEMENTS OF SOCIALISM 

goods of unequal value for each other, unit for unit, it is 
certain that one will receive a larger for a lesser value, and 
so profit by the transaction. It is equally certain, however, 
that no new value is created by the transaction. The sum 
total of values is the same after the transaction as before, 
only a change in ownership has taken place, not a change in 
the magnitude of the values themselves. We shall have to 
return to this subject later on: for the present it is enough 
to note that, even when unequal values are exchanged, 
profit is not created by the act of exchange. 

Upon the whole, the exchange of commodities takes the 
form of the exchange of equal values. This does not mean 
that all commodities are exchanged for one another, unit 
for unit. A lead pencil is not exchangeable for an auto- 
mobile. What is meant is that, as a general rule, capitalist 
exchange consists of the exchange of equal values, not of 
unequal ones. The basis of value being the abstract labor 
represented by the object of value, the rule is that commod- 
ities representing equally sums of abstract labor will exchange 
for one another upon a plane of equality. If the unit of 
commodity A represents a social labor content of 100 and the 
unit of commodity B represents a social labor content of 10, 
then the exchange-value of A as compared with that of B 
will be as ten is to one — it will require 10 units of B to pur- 
chase 1 unit of A. 

Advantageous exchange without profit: Let us suppose a 
case of simple exchange. A farmer has 100 bushels of wheat 
which he desires to exchange for, say, farm implements. 
A manufacturer of farm implements who desires the wheat 
offers the farmer a mowing machine, a plow and a horse- 
rake, the three implements being approximately equal to 
the wheat in value. If the value of the implements was 
materially less than that of the wheat the farmer would 
not agree to the bargain: he would prefer to sell the wheat 
for money and with the money buy the implements he desired. 
On the other hand, the manufacturer would likewise be 
careful to insist upon getting a value in wheat equal to the 
value of the implements he was giving. The transaction is 
equally beneficial to both parties, each obtains a use-value 
for what is, to him, not a use-value. But there is no increase 
of value as a result of it, no profit. 



SURPLUS-VALUE 143 

If the exchange instead of being made directly had been 
made indirectly through the medium, the farmer selling his 
wheat for 100 dollars and then paying 100 dollars for the 
implements to the manufacturer, who in turn paid 100 dol- 
lars for the wheat, the result would not be different. Exchange 
of commodities does not add to the magnitude of their 
value any more than the act of changing a twenty-dollar 
bill for twenty one-dollar bills adds to the amount of money. 

Wholesale exchanges: Stated in this simple form, it is 
easy to see that exchange does not add to value. But the 
wholesale exchange which goes on in capitalist society re- 
quires a vast and complicated mechanism to be exclusively 
devoted to the circulation of commodities. The farmer and 
the manufacturer of implements are not personally acquainted. 
They may be separated by hundreds or even thousands of 
miles. So the farmer sells his wheat for cash to dealers who 
send it to markets scores or even hundreds of miles away, 
where it is sold for cash to the consumers. On the other 
hand, the farmer buys his implements for cash from a dealer 
who has previously bought them from the manufacturer and 
paid the cost of their transportation. The flour is sold to 
the consumer at a price considerably higher than the farmer 
received for it, and the farmer in turn pays more for his 
implements than the manufacturer's price. Sometimes these 
price increments are spoken of as profits, but they are not 
profits at all. The cost of transporting the wheat from the 
farm in Dakota to the market in Chicago or New York, to 
the point where it becomes accessible to the consumer, of 
storing it properly, and of retailing it in the quantities 
needed by individual consumers, must be met, and is properly 
part of the cost of production. For the wheat has not been 
"produced" in an economic sense until it has been made a 
utility to the consumer. The same thing may be said of 
the implements which the farmer buys, and of all commodities 
in general. Thus to the first, or simple, production cost, 
illustrated in the cost of producing wheat on the farm from 
sowing to threshing, and in the manufacture of shoes at the 
factory from the raw material, leather, to the finished goods 
packed for shipment, there is added an additional cost 
which brings the total to what we may call the final, or 
social production cost. Just as relative exchange values 



144 ELEMENTS OF SOCIALISM 

are measured against each other in terms of abstract labor 
by the higgling of the market, so are these elements of final 
production cost adjusted and balanced. 

The exchange of unequal values : The exchange of unequal 
values does not in the slightest degree affect the principle 
we are discussing. While normal exchange is the exchange 
of equal values, the exchange of unequal values is not infre- 
quent. A large number of the class of middlemen, jobbers, 
brokers, dealers, speculators, and so on, do make profits 
through unequal exchanges, by "selling dear," as we say. 
But again, the sum of value is not affected by such exchanges. 
No part of that proportion of the sum of values which we 
call profit is created by exchange. 

"Buying cheap and selling dear" is therefore an explana- 
tion of the gains to the capitalist class as a whole. And that 
is the essence of our problem. We are not interested in the 
fact that A makes an exchange with B and that A gains 
what B loses, any more than we are in the fact that a pick- 
pocket takes another man's money. In that case, also, one 
gains and the other loses; but there has been no addition to 
the sum of existent values. Individual members of the 
capitalist class do lose, and their losses may, and often do 
represent the gains of other individuals in that class, but the 
capitalist class gains as a whole, and it is the sum of that 
gain which we must explain. 

How wealth is produced: Profits are a part of the total 
wealth of society. That wealth is the product of a union 
of labor and the forces of nature. The phrase, "Labor is the 
source of all wealth" is occasionally met with in a certain 
type of Socialist literature, but it is no part of Socialist 
theory. In particular, it is not a part of the Marxian theory 
of surplus-value as many writers suppose. On the contrary, 
Marx takes particular care to make it clear that he does not 
regard labor as the sole source of wealth. He quotes with 
approval the words of Petty that "Labor is the father and 
earth the mother of all wealth." He no more concerns 
himself with the exact share of each of these agents in pro- 
duction than we concern ourselves with the exact share of 
each parent in the life of a child. 1 What he does contend 

ll,l The use-values . . . i.e. the bodies of commodities, are combina- 
tions of two elements — matter and labor. If we take away the useful 



SURPLUS-VALUE 145 

is that labor is the source of all economic value. When 
critics assail the Marxian theory on the ground that it makes 
labor the sole source of wealth, they prove their ignorance 
of Marx and their inability to distinguish between wealth, 
consumption goods, and their value — an abstract quality. 

The nature of capital: It is one of the characteristics of 
"those societies in which the capitalist mode of production 
prevails' ' that the laborers do not own the means of pro- 
duction, the land, tools, machinery, factories and raw mate- 
rials. Machine production upon a large scale makes it 
impossible for the individual laborer to own these things. 
Industrial evolution has separated the laborer from the 
ownership of the material requisites of production. The 
ownership of these things by others than the actual users of 
them is the essence of the class division of capitalist society. 

Capital, therefore, is not to be defined simply as "wealth 
that is used to produce more wealth." It is all that and 
something more. It involves the social relation of produc- 
tion. Robinson Crusoe's spade and the familiar Indian's 
bow and arrow used to illustrate capital in ordinary economic 
discussion do not constitute capital at all as the Socialist 
uses the word. Wealth used to produce more wealth under 
certain conditions is capital. Under other conditions it is 
not capital. Just as bricks do not constitute a house except 
when they bear a certain relation to each other, or as a 
negro is only a slave under certain conditions, though he is 
always a negro, so a machine is only capital under certain 
conditions. The concept of capital is inseparable from the 
fundamental concept of capitalist production, namely, pro- 
duction and exchange for profit. Capital is wealth that is 
used for the production of more wealth with a view to the 
realization of profit through its exchange. This is what 
the Socialists mean when they say that capital is a "social 
relation expressed through the medium of things." And 

labor expended upon them, a material substratum is always left, which 
is furnished by Nature without the help of man. The latter can work 
only as Nature does, that is, by changing the form of matter. Nay, 
more, in this work of changing the form he is constantly helped by 
natural forces. We see, then, that labor is not the only source of 
material wealth, of use-values produced by labor. As William Petty 
puts it, labor is its father and the earth is its mother." — Karl Marx, 
Capital, Vol. I, chap, i, p. 50. (Kerr edition.) 



V 



146 ELEMENTS OF SOCIALISM 

when Socialists speak of the "abolition of capital," it may 
be added, they speak only of the abolition of that relation, 
not of the material things. 

Let us look briefly at the special form of social relation- 
ship between the capitalist and the laborer which results 
from the ownership by the former of the means of production. 
The capitalist wants to unite the productive power of the 
laborer to the means of production which he owns in order 
that he may make profit out of the result of the union. 
The laborer, on the other hand, must use the means of 
production which the capitalist owns if he is to produce 
wealth at all, and unless he does produce wealth he cannot 
live. He cannot buy the means of production from the 
capitalist. The only thing open to him is to sell that which 
he has which the capitalist is anxious to buy, namely, his 
laboring power, his capacity to produce new value. 

Labor-power is a commodity: We come now to a rather 
startling proposition, that the labor-power which the 
capitalist buys is a commodity subject to the same laws as 
all other commodities. To class human labor-power with 
pig-iron as a commodity may at first seem rather fantastic, 
but it is by no means an unwarranted classification. To be 
a commodity labor-power must have three qualites: (1) 
It must possess use-value; (2) it must possess exchange- 
value; (3) its value must be determined by the amount of 
abstract social labor which is represents, the socially neces- 
sary labor which it embodies. 

That labor-power possesses the first of these qualities 
needs no demonstration. Its use-value is obvious. It is 
also evident that it has exchange value. It is salable. 
We speak of the "labor market" as freely and naturally as 
we speak of the "wheat market." Or we speak of labor being 
"cheap" or "dear" just as we do in the case of ordinary 
commodities. The price of labor, wages, like the price of 
all other commodities, fluctuates. It may be temporarily 
lowered by the preponderance of supply over demand, or 
elevated by the increase of demand over supply. It may be 
made the subject of monopoly in certain cases, just as the 
prices of other commodities may be made the subject of 
monopoly. So far, then, the analogy holds good. But 
can we say that the value of labor-power is determined by 



SURPLUS-VALUE 147 

the amount of socially necessary labor-power it repre- 
sents? 

Ricardo held that the natural price of labor depends on 
"the price of the food, necessaries, and conveniences required 
for the support of the laborer and his family/ ' and that as 
the price of these things rises or falls so will wages rise and 
fall. 1 From this principle Lassalle developed his famous 
"iron law of wages" which greatly influenced the Socialist 
propaganda. But while wages do tend always to approximate 
the cost of the subsistence of the workers and their families 
in any given time and place, under the conditions and accord- 
ing to the standard of living generally prevailing, there are 
many other factors to be considered. As Marx points out, 8 
the law is much more elastic in its operation than Lassalle 
supposed. The living commodity is not a dead thing. First 
of all, the fluctuations of price caused by the interaction of 
supply and demand are very much more important than 
Lassalle's "iron law" implies. Second, "the standard of 
living" is a very elastic term, and varies according to occupa- 
tional groups, in different localities according to traditional 
influences, according to race and nationality, and to the 
general advancement of culture and the state of political 
development, expressing themselves in legislation for com- 
pulsory education, sanitary reforms, and other things which 
raise the standard of living. Finally by organization the 
workers may and do materially improve their standards of 
living. 

Wherein labor-power differs from other commodities: 
Within the limits indicated, labor-power is a commodity 
like any other. But there are important respects in which 
it differs from every other commodity. In the first place, 
"labor-power is not something apart from men, but is 
inseparable from, and closely bound up with, the lives of 
human beings. Beneath its price are psychological, physio- 
logical and historical conditions that do not affect other 
wares, and which introduce an element of permanence into 
money wages greater than exists in regard to other goods." 3 

1 Ricardo, Principles of Political Economy and Taxation, chap, v., 
§35. 

2 Cf., Value, Price and Profit, by Karl Marx, chap. xiv. 
8 The Road to Power, by Karl Kautsky, p. 104. 



148 ELEMENTS OF SOCIALISM 

Wages do not respond freely to fluctuations in the prices of 
the goods which enter into the laborer's standard of living 
for the reasons already indicated. When prices rise, wages 
are slow to follow. And even when prices fall, wages, while 
they must ultimately follow, do not immediately fall. 
Moreover, they do not fall at the same rate as prices in 
general. 

The laborer is in a peculiar position. He enters the labor 
market as a seller of his one commodity, labor-power. That 
commodity is not a thing apart from himself as are all other 
wares, but is a part of himself. Having sold his labor- 
power, he must go into the goods market and become a 
buyer pure and simple. His interest as a consumer is to buy 
cheap. Low prices are advantageous; high prices are dis- 
advantageous. Having sold his labor-power to the capital- 
ist, he confronts the product of that labor power in the 
goods market as a ware offered for sale by the capitalist 
who appeared* in the labor market as a buyer of labor- 
power, but now appears as a seller of labor product. 

These differences between labor-power and all other com- 
modities are all incidental to a greater difference. Labor- 
power is used up in the production of other commodities, 
embodied in them as it were. In this respect it resembles 
all other commodities which, as raw materials, are similarly 
used up. But labor creates new value in the process of being 
used up, and this quality no other commodity has. In the 
manufacture of shoes, for example, machinery, leather and 
labor-power are used. The leather is used up, transformed, 
but it does not add to its own value. Machinery is used 
up to a degree, but it does not add to its own value. It 
loses a part of its value through wear and tear and adds it 
to the value of the raw material, to reappear in the value of 
the product, shoes. But labor-power does increase its own 
value in the process of being consumed. 

Surplus-value: For the commodity he sells the laborer 
receives its value, measured by the price-form, wages. As 
we have seen, his commodity is a somewhat peculiar one 
and its price laws are in some important respects peculiar 
to itself. But for the purpose of illustration we will disregard 
these peculiarities and assume that the laborer receives the 
full value of his commodity, the social labor cost of its pro- 



SURPLUS-VALUE 149 

duction. When purchased by the capitalist, this commodity, 
like every other, belongs to the purchaser. Its use-value 
belongs to him, and no more belongs to the laborer who sold 
it than the sugar a grocer sells belongs to him after the sale. 
The laborer has received the exchange-value of his commodity 
in return for its use-value. Now, in being used up, the power 
to labor which the laborer sells and the capitalist buys will 
produce more than the equivalent of its own value. It may 
produce twice the equivalent of its own cost of production, 
twice its own value and price — the two terms being in this 
case identical. This is the central idea of the Marxian theory 
of surplus-value. 

How surplus-value is produced: The capitalist buys the 
labor-power of a given number of laborers for ten hours a 
day. He pays the market price, wages, for this labor-power 
and has it used up — just as raw materials are used up — to 
produce other commodities for sale. When they have worked 
five hours, let us say, the workers have produced value 
equivalent to their wages. If they stopped at that point, 
the capitalist would find added to the raw materials by labor- 
power value equal to the price paid for the labor-power. 
But the workers do not stop at this point. They go on 
working for five hours more, creating further value. These 
figures are, of course, arbitrarily chosen to illustrate a prin- 
ciple. The principle itself would not be Effected if we 
assumed the working day to be twelve hours and further 
assumed that it required ten hours to produce the value of 
the labor-power. According to our illustration, then, each 
worker gives the product of ten hours' labor in return for the 
product of five. This balance represents the surplus-value 
(mehrwerth) of the capitalist. 

Such is the theory. We may further illustrate it by the 
following example: Assume the average cost of subsistence 
for a laborer and his family in a given time and place to be 
$1.00 a day; that wages are equal to the cost of subsistence, 
namely, $1.00 per day, and that it takes, on an average, 
five hours' labor to produce that amount in value. A manu- 
facturer employs 1,000 hands at $1.00 per day per man, 
and the length of the working day is ten hours. The daily 
cost of labor-power is, therefore, $1,000.00. The value of 
raw materials used is also $1,000.00. The value of machinery 



150 ELEMENTS OF SOCIALISM 

and plant is depreciated to the extent of $100.00 a day. At 
the end of ten hours it is found that the total values resulting 
from the combination of these is greater than the sum of 
all three by a sum exactly equal to the value of the raw 
materials or that of the labor-power. The capitalist 
paid, — 

For labor-power $1,000.00 

For raw materials 1,000.00 

For repairs, replacement of machinery, etc... 100.00 

$2,100.00 

He receives for the gross product 3,100.00 

The surplus-value is, therefore 1,000.00 

It is obvious that this increase of value does not come into 
being of itself. It can only have one origin, in the living 
force, labor-power. Just as the simplest concept of wealth 
involves the act of transforming some natural object by 
human effort, so here human effort has been transforming 
raw materials and creating new values. 

Division of surplus-value: The surplus-value created by 
the laborers does not of necessity all belong to the capitalist. 
He may and generally does have to divide it with others, 
landowners, money-lenders, and so on. The sum total of 
surplus-value created by the laborers constitutes the fund 
from which all rents, interests and profits must be paid. 
It is from this fund, too, that capital is replenished and 
increased, including the capitals necessary to the conquest 
and development of foreign markets. The division of the 
surplus-value sometimes causes much strife as, for example, 
when landlords insist upon getting the lion's share and are 
bitterly opposed by the capitalists. 

The workers have little interest in these struggles over the 
division of the surplus-value they create, except in so far 
as the struggles give rise to political or other conditions 
which enable the workers to improve their own conditions 
by taking advantage of the divisions in the ranks of the 
exploiting class. It does not matter to the workers whether 
more or less of the surplus-value goes to a particular section 
of the exploiting class. Their interest is to give a minimum 
of surplus-value, to be exploited as little as possible. On 
the other hand, it is to the interest of the entire class of 



SURPLUS-VALUE 151 

those who share the surplus-value to resist the efforts of the 
workers to reduce its amount, and to force them to give 
up as much as possible. This is the casus belli of industrial 
conflict, the motive of the class war. The cause of class 
antagonisms is surplus-value, not the speeches and writings 
of "agitators"; not the labor unions. These are effects, not 
causes. 

Rate of surplus-value and rate of profit : As we have seen, 
of the total mass of capital which the capitalist advances, 
only one portion, the amount paid for labor-power, adds to 
its own value and produces an excess, or surplus- value. That 
portion of the capital which is expended on raw materials 
and other means of production does not change the magnitude 
of its own value in this manner. Therefore Marx calls the 
former portion variable capital, and the latter portion 
constant capital. In our illustration we assumed the amount 
of surplus-value to be exactly equal to the variable capital. 
In the language of Marx, the ratio of surplus-value to 
variable capital is 100 per cent, in this case. This expresses 
the degree of the exploitation of the workers. That is, they 
are exploited at the rate of 100 per cent, both as regards 
value and number of hours of labor. We are not concerned 
with the actual rate of surplus-value, but with the illustra- 
tion of the principle. 

Now, it will be observed that the foregoing ratio is by no 
means the ratio of profit. In other words, rate of surplus- 
value and rate of profit are wholly different conceptions, 
though they are frequently confused with one another. To 
find the rate of profit we must consider the total capital, 
constant as well as variable. Thus, the ratio of surplus- 
value to variable capital is 100 per cent, but the ratio of 
surplus-value to the whole capital is 47.6 per cent. This last 
gives the rate of profit. Let us now suppose that, instead 
of the price of labor-power being fixed at its proper value, 
it falls considerably below it, as a result of an excessive 
supply. The capitalist now pays 80 cents per day instead 
of $1.00 as before. The variable capital will now be $800.00 
instead of $1,000.00 as formerly. The value of the product 
at the end of the day will be the same. The rate of surplus- 
value — the degree of exploitation — will rise, and so will the 
rate of profit. The capitalist now pays, 



152 ELEMENTS OF SOCIALISM 

For labor-power $800.00 

For raw materials. 1,000.00 

For repairs, replacement of machinery, etc 100.00 

He receives for the gross product 3,100.00 

The surplus- value is, therefore 1,200.00 



$1,900.00 



Thus, the rate of exploitation, that is, the ratio of surplus- 
value to variable capital, rises from 100 per cent to 150 per 
cent, while the rate of profit, the ratio of surplus-value to 
the total capital, rises from 47.6 per cent to 63.1 per cent. 
Expressed in hours of labor time the workers now give up 
six hours above the number required to replace their wages 
instead of five hours as before. 

It may happen, however, that the increase in the rate of 
surplus-value will be accompanied by a decrease in the rate of 
profit. The capitalist is always trying to cheapen produc- 
tion by (a) lowering wages, (b) lengthening the working day, 
(c) increasing the productivity of labor. To the first two 
methods there are very obvious limits — physical endurance 
of the workers, legislation, and so on. The main energies 
of capitalist management are directed to the third method, 
through better organization, improved machinery, reduction 
of wasteful expenditures, and the like. Therefore, there is 
at all times going on a process which Marx calls the changing 
organic composition of capital. In other words, the relation 
of variable to constant capital changes from time to time. 
The portion of capital laid out in wages decreases, increased 
production resulting without any corresponding increase — 
but sometimes even a decrease — in the number of workers 
employed and the total expenditure upon wages. Thus, 
assume that the capitalist pays, 

For labor-power $600.00 

For raw materials 1,500.00 

For repairs, replacement of machinery, etc 100.00 

$2,200.00 
And that he receives for the gross product... 3,400.00 
The surplus-value is 1,200.00 

The rate of surplus -value is now 200 per cent, but the 
rate of profit is 57.2 per cent. 



SURPLUS-VALUE 153 

Dangers of a too narrow interpretation of the theory: 

Many criticisms of the theory, including those of the leading 
members of the Revisionist school, are based upon interpreta- 
tions of the theory which are too narrow and dogmatic. 
These criticisms have the same cardinal defect that vitiates 
some of the expositions of Marx's theories by his dogmatic 
and unphilosophical followers. They interpret Marx's 
theoretical conclusions too narrowly and in that form attempt 
to apply them to actual life. For example, Marx reasoned 
his theory of value with mathematical method and exact- 
ness, but he knew perfectly well that in actual life the law 
could not and did not operate with anything like the pre- 
cision and inflexibility which he employed in its demonstra- 
tion. No law ever does. He assumes, for the purpose of 
elaborating his theory, that all commodities are sold at 
their value, but later on he admits that such is not the case, 
that the prices of commodities are usually either higher or 
lower than their value. But this could not be understood at 
all except by the aid of the law of value. While a narrow 
and rigid interpretation of the theory of surplus-value would 
lead to the conclusion that the workers are never exploited 
except directly as producers, through wages, such an inter- 
pretation would be wholly unwarranted. Some of the 
doctrinaire followers of Marx have so interpreted the theory, 
however, and made it the theoretical basis for a practical 
policy which would prevent the Socialist movement from 
participating in many reform movements of immediate 
concern to the workers. But not so Marx. He shows very 
clearly that the workers are exploited as consumers 1 also, 
and this secondary exploitation tends to become more 
important with every advance in the direction of monop- 
oly. 

In like manner, many of the critics of the theory have a 
very much narrower conception of labor than the Marxian 
theory justifies, if we consider the theory itself rather than 
the examples which Marx uses to illustrate it. To assume 
that Marx disregards the productivity of managerial labor, 
the organization and direction of industry, is foolish in the 
extreme. On the contrary, Marx describes with great clear- 
ness the development of a special type of "labor," that of 

1 Capital, Vol. Ill, pp. 715-716. 



154 ELEMENTS OF SOCIALISM 

direction— a class whose "established and exclusive func- 
tion" is the work of supervision. 1 So far as any person 
shares in the necessary labor of production, including in 
the term "production" all the processes involved in the 
transformation of the raw material into the finished product 
delivered to the consumer, that person is performing useful 
labor. But the capitalist, as such, performs no labor. Or, 
to put the matter more clearly, whatever any person receives 
over and above the value of productive labor performed, 
is of necessity a sum exploited from other people's labor. 
There is no other explanation of the phenomena of pure 
profit. 

The theory does not involve the ethics of distribution: 
One of the most common misconceptions of the theory, a 
misconception which has served as the basis of many crit- 
icisms, is that which regards it as involving the ethics of 
distribution. The usual statement is that the theory of 
Marx leads to the conclusion that "All wealth is produced 
by labor, and should, therefore, belong to labor." It is then 
assumed that in the Socialist State an ethical system of 
distribution will be realized, based upon the labor-value 
theory, and that each worker will get approximately the 
value of his own labor product, minus his share in the 
necessary social charges. There is nothing in the Marxian 
theory to support either the statement or the assumption 
based upon it. Marx nowhere reasons that the workers 
ought to get the full value of their labor. Indeed, as Engels 
points out, Marx opposed the earlier Socialists of the Ricard- 
ian school for confusing economics with ethics. He based 
his whole argument for Socialism, not upon the right of 
the producers, but upon the impossibility of the capitalist 
system to last, the inevitability of the development of 
capitalist industry to the point where the industrial and 
legal forms of capitalism can no longer contain it. Marx 
invariably scoffed at the "ethical distribution" idea, and 
when the Gotha Platform of the German Socialists was 
adopted in 1875 he was very much incensed, not only because 
he regarded its opening sentence, "Labor produces all 
wealth/ ' as wrong in itself, but because it seemed to him 
to lead directly to the old idea that Socialism must rest its 

1 Capital, Vol. I, chap, xiii; Vol. Ill, chap, xxiii. 



SURPLUS-VALUE 153 

case upon the right of the producer to the whole of his 
product, instead of upon the inevitable breakdown of capital- 
ist society. In other words, Marx never took the position 
that Socialism ought to take the place of capitalism, because 
the producers of wealth ought to get the whole of their 
product. His position was that Socialism must come, simply 
because capitalism could not last. It would, of course, be 
idle and disingenuous to deny that of the actual propaganda 
of the Socialist movement no small part consists of moral 
protests against the manifest injustice of capitalist society, 
and of arguments in favor of a juster social system. But 
these things are not included in the Marxian theories. In so 
far, the Socialist movement is bigger than Marx. Even if 
his entire system of philosophy could be destroyed, the 
inequalities existing, the striking social contrasts of extreme 
wealth and extreme poverty co-existent, the undeniable fact 
that useful labor often brings only a life of hardship while 
luxury and ease are often the portion of those who do no 
labor at all, would undoubtedly afford a basis for a movement 
aiming at the collective ownership of the means of production. 
With that we are not concerned at present. The important 
point is that, according to Marx, the concentration of 
capitalism must go on until it bursts its shell and a new 
epoch is ushered in. 



156 ELEMENTS OF SOCIALISM 



SUMMARY 

1. The sole motive of capitalist enterprise is the realization of a 
profit from the sale of goods. 

2. Labor is not the source of all wealth, but it is the source of all 
economic value. 

3. Capital is a social relation expressed through the medium of 
things the possession of which by the capitalist makes it necessary for 
the laborer to sell his commodity, labor-power, to the capitalist. 

4. The difference between the total value produced by labor and the 
value of the labor-power consumed in its production, is surplus-value, 
the rate of which is the measure of exploitation. 

5. The difference between the value of the finished product and 
the total cost of production is profit. The rate of profit does not 
necessarily correspond to the rate of surplus-value. 

6. The theory of surplus-value does not involve the ethics of dis- 
tribution. 

QUESTIONS 

1. Discuss the relation of exchange to profit. 

2. Criticise the statement: " Labor is the source of all wealth." 

3. Distinguish between the Marxian and the current economic 
definition of capital. 

4. How is the value of labor-power determined? 

5. What is the essential difference between labor-power and other 
commodities? 

6. What is surplus-value? How is it produced? 

7. Explain the process of the division of surplus-value? 

8. How is the rate of profit determined? 

9. What is secondary exploitation? 

Literature 
See references at close of preceding chapter. 



CHAPTER XIV 

THE LAW OF CONCENTRATION 

The stages of capitalism: The period of domestic industry 
in which, the guild organization having broken down, the 
mass of craftsmen were employed under the wage system 
by masters who were no longer craftsmen themselves, may 
be considered as the first stage of capitalism. This period 
was characterized by what Marx calls merchants' capital — 
capital invested in raw materials and finished goods rather 
than the tools of production. In some industries the massing 
of large numbers of workers in factories had already begun, 
but they still remained hand workers. 

The second stage of capitalism began with the age of 
machinery. Industrial capital in the various forms of 
factories, machinery, and means of transportation became 
more important than merchants' capital. Competition 
between capitalists on the one hand, and between wage- 
workers on the other, was the rule. The policy of laissez- 
faire was the accepted ideal and competition was regarded 
as the life of trade. 

The third and last stage of capitalism is marked by the 
concentration of industry and the elimination of competition. 
Writing before this stage had fairly opened, Marx predicted 
that competition would destroy itself, that the business units 
would continuously increase in magnitude until at last 
monopoly emerged from the competitive struggle. Competi- 
tion being self-destructive inevitably breeds monopoly. 
This monopoly becoming a shackle upon the system of pro- 
duction which produced it, must in turn give way to some- 
thing else, namely, the socialization of industry. Says 
Marx: "The monopoly of capital becomes a fetter upon the 
mode of production, which has sprung up and flourished 
along with it, and under it. Centralization of the means of 
production and socialization of labor at last reach a point 

157 



158 ELEMENTS OF SOCIALISM 

where they become incompatible with their capitalist 
integument. This integument is burst asunder. The knell 
of capitalist private property sounds. The expropriators are 
expropriated." 1 

Criticism of the theory: This view has been generally 
accepted by Marx's followers. The disappearance of the 
middle class and the reduction of most of its members to 
the ranks of the proletariat have been regarded as self-evident 
truths of Socialism. But within recent years the theory has 
been subject to a good deal of criticism, both from within 
and without the Socialist movement. Many of the leading 
Socialists in Europe and America have participated in the 
discussion, and while the results of the discussion have 
been rather inconclusive thus far, it is now very generally 
admitted that the middle class is not disappearing in the 
manner and at the rate which Marx anticipated; that petty 
industries have not all been swept away; that small retail 
establishments still persist, and, in some cases, increase in 
number and that concentration in agriculture does not 
manifest itself in the form of immense bonanza farms swal- 
lowing up all the smaller farms. 

Bernstein points out that the number of share-holders 
in industrial corporations is increasing, and that in England 
in 1898 there were more than a million share-holders. The 
share-holders in the Manchester Canal amount in round 
numbers to 40,000, and in Lipton's there are more than 
74,000 share-holders. The number of taxable incomes is 
increasing, and the increase is most noticeable in the number 
of moderate incomes. A similar thing is seen in Germany. 
In Prussia the population doubled in the period 1854-1898, 
but the number of persons with incomes of more than 
$750.00 a year increased sevenfold. Similar figures are 
quoted from other countries to show that, judging by income 
standards, the number of persons in the middle class is on 
the increase. 

Persistence of small industrial units: Critics of the theory 
also point to the persistence of petty industrial establish- 
ments and small retail stores in support of their position. 
That a great many such establishments and stores do exist 
is undeniable. There are many trades and branches of 

i Capital, Vol. I, p. 837. 



THE LAW OF CONCENTRATION 



159 



trades which can be carried on just as cheaply on a small 
scale as on a large scale, or nearly so. This is the case with 
different branches of wood, leather, and metal work. A 
great deal of misunderstanding exists upon this point. It 
is not denied that there is an enormous development in the 
direction of larger industrial units, but that the small fac- 
tories and workshops can and do continue to exist in large 
numbers. For example, if we take the figures given in the 
reports of the Prussian census for 1907, 1 we shall see both 
these facts very clearly. The figures refer to mercantile and 
manufacturing establishments: 

TABLE III 



Establishments. 


Numbers. 


Persons Employed. 




1895. 


1907. 


1895. 


1907. 


Quite Small (1 person only) 

Small (2—5 persons) 


1,029,954 

593,884 

108,800 

10,127 

380 

191 


955,707 
767,200 
154,330 

17,287 
602 
371 


1,029,954 
1,638,205 
1,390,745 
1,217,085 
261,507 
333,585 


955,707 
2,038,236 


Medium (6—50 persons) 


2,109,164 


Great (51—500 persons) 


2,095,065 


Very Great (501-1000 persons) 

Giant (1001 persons and over) 


424,587 
710,253 




1,743,336 


1,895,497 


5,876,083 


8,332,912 



The decrease in the number of establishments classified as 
"quite small" indicates nothing except the passing out of 
existence of a percentage of household industries. The 
increase in the "small" and "medium" establishments is 
quite as marked and as remarkable as the increase in the 
"very great" and "giant" establishments. The figures do 
indicate a very real tendency to concentration, however. 
While the number of establishments increased only 8.73 
per cent the number of persons employed increased 41.81 
per cent. 

American statistics : Far more important than increase or 
decrease of the number of units is their relative significance 

x The figures are taken from Bernstein's Evolutionary Socialism, 
p. 57. They appeared originally in this form in Die Neue Zeit, XV. 2, 
p. 597. 



160 



ELEMENTS OF SOCIALISM 



>, 



in the total production. This phase of the subject has been 
very ably and comprehensively dealt with by Mr. Lucien 
Sanial, a well-known Socialist statistician. He takes twenty- 
seven of the most typical manufacturing industries and com- 
pares the number of establishments, number of persons em- 
ployed and amount of capital invested in the years 1880, 
1890 and 1905. He shows that there was a decrease in the 
number of establishments from 1880 to 1905 of 35.3 per cent, 
accompanied by an increase in the number of persons 
employed of 60.2 per cent, while the capital invested in the 
smaller number of establishments was 262.6 per cent greater 
than the capital invested in the smaller number. 

TABLE IV 



Year. 


Number of 
Establishments. 


Number of 
Workers. 


Capital. 


1880 


63,233 
51,912 
44,142 


1,080,200 
1,611,000 
1,731,500 


$1,276,600,000 


1890 


3,324,500,000 


1905 


4,628,800,000 







In another table Mr. Sanial takes forty-seven industries. 
These forty-seven industries comprised 29,800 establish- 
ments in 1900. By 1905 the number had fallen to 26,182. 
Side by side with this decrease in the number of establish- 
ments there was a marked increase in the amount of capital 
invested, which was $1,005,400,000 in 1900, and $1,339,- 
500,000 in 1905. In the same five years the number of 
workers increased only from 618,000 to 749,000. Here, 
again, in this group of the smaller industries we find the same 
evidences of concentration — fewer establishments, large 
increase of capitals and an increase in the number of wage- 
earners which is not equal to the increase in capitalization. 

But even more significant than any of these figures are 
those which show the relative portion of the total volume 
of manufacture for which the small establishments are 
responsible. Table No./IV shows that the two largest classes 
of establishments number only 24,163, 11.2 per cent of the 
total number. But they represent 81.5 per cent of the total 
capital, $10,334,000,000 and employ 71.6 per cent of all the 
wage-workers in manufacturing industries. 



THE LAW OF CONCENTRATION 



161 



TABLE V 
MANUFACTURING ESTABLISHMENTS, 1905 » 



Capitals. 



Num- 


Per 


ber. 


Cent. 


71,162 


32.9 


72,806 


33.7 


48,144 


22.2 


22,281 


10,3 


1,882 


0.9 



Total 
Capital. 



Per 

Cent. 



Number of 
Workers. 



Per 
Cent. 



Less than $5,000 

$5,000 to $20,000 

$20,000 to $100,000 . . . 
$100,000 to $1,000,000.. 
Over $1,000,000 



$165,300,000 
531,100,000 
1,655,800,000 
5,551,700,000 
4,782,300,000 



1.3 

4.2 
13.0 
43.8 
37.7 



106,300 

419,600 

1,027,700 

2,537,550 

1,379,150 



1.9 

7.7 
18.8 
46.4 
25.2 



These figures conclusively prove that industrial concentra- 
tion is an indisputable fact, so far as the United States is 
concerned at least. Here, as in Europe, numerous petty 
industrial establishments continue to exist, but their influence 
is relatively insignificant. The above table shows that the 
establishments capitalized at less than $5,000.00 constitute 
32.9 per cent of the whole number of establishments, but 
represent only 1.3 per cent of the total capital and 1.9 per 
cent of the total number of wage-workers employed. This 
process is not confined to the United States, but goes on in 
every industrial nation. 

The persistence of petty industries is unimportant: From 

the Socialist point of view the persistence of small industrial 

enterprises is not only quite unimportant, but is, for a long 

time to come at least, inevitable. They may even continue 

to exist under a Socialist regime. The preparedness of 

society for Socialism, for social ownership and control, is 

not to be determined by the number of little industries and 

business establishments that still remain, but rather by the 

number of great ones which exist. Karl Kautsky argues 

this very ably. The ripeness of society for Socialism is not 

> to be disproved by the number of wrecks and ruins which n 

it abound. " Without a developed great industry, Socialism 

^ ?is impossible," says KautsEy. "Where, however, a great 

***■ industry exists to a considerable degree, it is easy for a 

Socialist society to concentrate production, and to quickly rid 

itself of the little industry" 2 

While some petty industrial and business establishments 

1 The table is quoted from Socialism Inevitable, by Gay lord Wilshire, 
p. 326. 

3 Kautsky, The Social Revolution, p. 144. 



162 ELEMENTS OF SOCIALISM 

undoubtedly do exist, and even increase in number, the 
increase of large industrial establishments employing many 
more workers and much larger capitals is much greater. 
The same thing is true of the retail trades. Furthermore, 
these petty industries are very transient and unstable, being 
absorbed or crushed out of existence as soon as they get 
big enough to be worthy of attention on the part of the power- 
ful industrial corporations, either as competitors to be feared 
or as desirable tributaries. So long as they simply maintain 
their owners at or near the average wage-earner's standard 
of life they pass unnoticed, but once they manifest signs of 
becoming prosperous and potentially dangerous as competi- 
tors they are either absorbed or relentlessly crushed. The 
small corner drug store may exist as an individual enterprise, 
but generally it can only do so if its "proprietor" consents to 
become virtually an agent for some great corporation. If he 
refuses, he is very likely to find himself matched against a 
competitor who can ruin him. In all our large cities to-day 
there are drug stores, cigar stores, restaurants, saloons, 
grocery stores, and so on, which are owned by great corpora- 
tions having branch establishments all over the country. 

Concentration of control : We must be careful to recognize 
the fact that concentration of control may be just as import- 
ant as concentration in industry. It may be true that 75,000 
stock-holders own stock in the Pennsylvania Railroad, but 
the influence of the stock-holder is negligible, and the power 
is as effectively concentrated in the hands of a few men as 
though they owned every share of the stock. This concentra- 
tion of control in the hands of a few is more important than 
is generally realized in the discussion of the subject of con- 
centration. It enables the operation of industry to be carried 
on for the benefit of a class, and so adds stability to class rule. 

Concentration in agriculture: The most damaging criti- 
cisms of the theory are those directed against its application 
to agriculture. Marx conceived the general process of indus- 
trial development, including the more or less rapid extinction 
of petty production, to be repeated in agricultural industry. 
He regarded the small farm as being incompatible with the 
development of a really rational agriculture, just as the small 
workshop was incompatible with really rational production, 1 

l CL i Capital, Vol. Ill, pp. 724,938-939, etc. 



THE LAW OF CONCENTRATION 163 

that is, production in the most efficient manner. Ration- 
alizing agriculture and rendering it capable of being conducted 
upon a gigantic scale seemed to Marx to be an inevitable 
result of capitalistic development. The advance of agricul- 
tural chemistry and the invention of power machinery to 
take the place of most of the cumbrous and slow hand labor 
of the farm implied, he believed, the practical extinction of 
the small farm through the old method of big fish eat little 
fish, numerous small farm units being concentrated into a 
few large ones, operated by capitalists. 

For a few years it seemed as if this prediction was being 
rapidly fulfilled, especially in the United States through the 
great "bonanza farms. " But in recent years there has been 
a marked tendency in the opposite direction, both in this 
country and in Europe. The number of farms is not decreas- 
ing, but increasing; there is no increase in the average farm 
acreage to suggest the absorption of smaller farm units 
by larger ones, but a decrease. As we have seen in Chapter 
II, the increase in the number of small farms is accompanied 
by a decrease in the percentage of farm operators who own 
their own farms. Hence, in the discussion of the subject, 
the critics of Marx and those of his disciples who cling to 
the belief that the theory of concentration holds equally 
good in agriculture and manufacture rely upon the same set 
of figures. One side points to the increase in the number 
of farms, while the other side points to the decrease in the 
proportion of free and unencumbered ownerships. 

Concerning the actual ownership of the farms operated by 
tenants we know very little indeed. It is possible that a 
full investigation of the subject would reveal the fact that 
concentration of farm ownership has proceeded much further 
than is commonly supposed. The same may be said of farm 
mortgages. In 1890 the mortgaged indebtedness of the 
farms of the United States was $1,085,995,960, a sum almost 
equal to the value of the entire wheat crop. Here, again, 
we know very little about the ownership of farm mortgages. 
That many of the insurance, banking and trust companies 
have large investments in them we know, and this, too, is a 
phase of concentration of farm ownership which must be 
taken into account. Moreover, as we also noted in Chapter 
II, the modern American farm is undergoing a great trans- 



164 ELEMENTS OF SOCIALISM 

formation in that many of the things formerly regarded as 
essential to the farm are now separated from it. Butter- 
making and cheese-making have largely passed from the 
farm to the factory. In other words, division of labor and 
the introduction of machinery have led to the absorption of 
many of the functions of the farm by capitalistically owned 
factories. To these considerations may be added the increas- 
ing divorce of the farmer from the ownership of the necessary 
equipment of the industry under modern conditions, includ- 
ing the grain elevators, the cold storage houses, and even the 
railroads. 

Permanence of the small farm: A consideration of the 
foregoing factors puts the subject of agricultural concentra- 
tion in a new light, and suggests that there are processes of 
concentration going on of which Marx never dreamed, and 
which are not obvious. At the same time, even when those 
things are taken into account, it must be admitted that the 
concentration Marx had in mind, namely, the elimination 
of small scale agricultural production by means of the superior 
force of production possible upon farms of immense size, 
conducted upon capitalist lines, is not apparent anywhere. 
The small farm, therefore, cannot be regarded as transitory, 
a relic of the past, but must be regarded as one of the most 
important factors in our economic system, destined to con- 
tinue as such for a long time to come, perhaps permanently. 

Concentration of wealth: We need only briefly consider 
the concentration of wealth. It is a rather common error 
to confuse the concentration of wealth with the concentra- 
tion of capital. If all the units in a given industry were to 
be united in a single industrial corporation, that would be a 
perfect example of the concentration of capital. But it is 
not inconceivable that every one of the owners of the units 
might have a share in the corporation exactly equal to the 
capital value of his particular unit. There would then be 
no concentration of wealth as an immediate result of the 
concentration of the industry itself. That concentration of 
wealth might later develop from it is beside the point of 
discussion. 

The principal bearing of this question upon Socialist 
theory is the test it provides of one of Marx's most famous 
generalizations, that the middle class must disappear and 



THE LAW OF CONCENTRATION 165 

society come to be represented by two polar classes, the rich 
capitalist class and the proletariat. There is probably no 
subject of equal importance in the whole realm of economic 
discussion upon which it is more difficult to get conclusive 
evidence. The principal data are (1) statistics of taxable 
incomes and inheritances in countries where these are taxed; 
(2) the number of savings bank deposits; (3) statistics 
relating to the number of investors in industrial and com- 
mercial enterprises. The inherent defects of all three sources 
are easily seen and universally admitted. We need only note 
some of the most important defects. 

Defects in principal sources of evidence : With respect to 
income taxes the universal tendency is to understate the 
amount of large incomes. It was this tendency which once 
caused a British prime minister to declare that the income 
tax had made a nation of perjurers. The statistics of inher- 
itance taxes do not reveal all the truth, for the reason that 
where such taxes are imposed it is a common practice for 
large land-owners and other property-owners to transfer their 
properties to their heirs during their lifetime, thus escaping 
the tax. This has been notoriously the case in England since 
the imposition of the so-called "death duties." The number 
of savings banks deposits is of very little value as evidence 
in this discussion, because a very large proportion of the depos- 
its are made by children, petty savings. On the other hand, 
many business men make it a practice to place deposits in a 
number of savings banks, and their deposits, being relatively 
large, inflate the average and destroy the value of any average 
of per capita deposits. Spahr shows, for example, that in 
New York, while the number of savings bank deposits was 
more than twice the total number of families, two-thirds 
of the families had no bank accounts at all, nor any other 
registered property whatsoever. 1 The statistics relating to 
the number of share-holders in corporations are equally 
worthless. We have no means of knowing what proportion 
of the total number consists of petty investors, people who 
own one or two shares in a single company at most, repre- 
senting their entire capital, and what proportion is made 
up of duplications — people who are investors in many 

1 The Present Distribution of Wealth in the United States, by Chas. 
B. Spahr, p. 57. 



I 

166 ELEMENTS OF SOCIALISM 

corporations, and so appear again and again in the total 
number. 

Definite evidence of concentration: But while we cannot 
measure with any degree of accuracy the concentration 
which has taken place, there is overwhelming evidence of the 
fact that it has been considerable. The fact is hardly dis- 
puted by anybody. While in the United States great 
extremes of wealth and poverty were relatively unknown in 
the early part of the nineteenth century, to-day such extremes 
are common, and multi-millionaires and paupers are about 
equally characteristic of our social life. The most careful 
investigation of the subject yet made is that made in 1895 
by the late Dr. Charles B. Spahr, who found that 44 per cent 
of the families in the United States owned practically no 
property at all; that seven-eighths of the families owned 
barely one eighth of the national wealth, and that one per 
cent of the families owned more than the remaining ninety- 
nine per cent. 1 It is certain, moreover, that since that 
time there has been a marked increase in the degree of con- 
centration. 

The Socialist view of concentration : The concentration of 
economic power and of social wealth in the hands of a class 
is a necessary stage in economic evolution, through which 
society must pass before it will be possible to conduct pro- 
duction upon a cooperative basis with collective responsibil- 
ity. The evils which result are incidental and it would be 
foolish to check the economic development because of the 
pain which it involves, even if that were possible. Wherever 
injury can be minimized it is worth while to do so, and, so 
far as the workers are concerned, it is necessary for them to 
combine for that purpose. That is the reason for trades 
union activity and for political activity directed toward 
remedial social reforms. Within capitalist society itself the 
industrial forms of a new society are being fashioned. Along- 
side with this process the education and organization of the 
workers is going on. The workers of a century ago could 
not have established an industrial democracy, even if they 
had been educated and trained to participate in democratic 
government. They were limited by the isolated hand pro- 
duction of the time. But society has made tremendous 

1 Spahr, op. cit., p. 69. 



THE LAW OF CONCENTRATION 167 

strides. We are already in the presence of great monopolies 
which appear to the Socialist as industrial forms ready for 
the spirit of democracy, of Socialism. 



SUMMARY 

1. Under capitalism there is a uniform tendency toward the con- 
centration of industry in the hands of the few. 

2. The persistence of competition in petty industries is relatively 
unimportant and does not invalidate the theory of concentration, 

3. The same tendency is shown in modern agriculture through the 
decreasing proportion of farms owned by their operators, and in the 
increasing dependence of the farmer upon capitalist industry. 

4. Wealth as well as capital tends towards class concentration. 



QUESTIONS 

1. Characterize the three stages of capitalism. 

2. On what grounds is the theory of concentration attacked? 

3. How may the persistence of small industries be explained? 

4. What was the theory of Marx in regard to agricultural concen- 
tration? How must it be modified? 

5. Alonjg what lines is the dependence of the farmer upon capitalist 
industry increasing? 

6. What are the difficulties involved in determining the degree of the 
concentration of wealth? 

7. What is the Socialist attitude toward the concentration of wealth 
and industrial power? 

Literature 

Bernstein, E., Evolutionary Socialism, pp. 40-73. 
Kautsky, K, The Social Revolution, pp. 37-65, 137-167. 
Marx, Karl, Capital, Vol. I, chap, xxix-xxxii; Vol. Ill, chap, xxxvii and 
xlvii. 

Spahr, C. B., The Present Distribution of Wealth in the United States. 
Spargo, John, Socialism, a Summary and Interpretation, chap. v. 
Wilshire, G., Socialism Inevitable. 



CHAPTER XV 

MONOPOLIES AND TRUSTS 

Advantages of large scale production: The industrial 
revolution demonstrated the overwhelming advantages of 
division of labor and power machinery over the old handi- 
craft system. With the improvement of transportation 
facilities the early form of the factory system is in turn 
supplanted by a system of large scale production whose 
units are immense factories, often employing thousands of 
hands. Large scale production saves in the purchasing of 
raw materials and in the application of power. Materials 
and coal can be purchased in train loads cheaper than in 
car loads. Five thousand horsepower costs much less than 
ten times as much as five hundred horsepower. Large scale 
production makes possible the use of expensive machin- 
ery and the attainment of a high degree of mechanical 
efficiency in consequence. 

The labor cost is relatively less. Greater subdivision of 
labor makes larger production possible. The cost of superin- 
tendence is relatively lower, and the whole organization can 
be made more efficient and more nearly perfect than would 
be possible with production on a small scale. Different 
grades and kinds of goods can be made in different plants 
belonging to the same concern, and each plant can run con- 
tinuously on the same grade, thus saving the cost of changing 
machinery. By-products can be fully utilized. The butcher 
who kills three or four animals a week can use nothing but 
the best parte of the meat and the hide, but in a great packing 
house not an ounce of material need be wasted. Petroleum 
could be distilled on a small scale, but the residuum would 
be wasted and only the kerosene used. In a Standard Oil 
refinery the petroleum yields not only kerosene and gasoline, 
but also lubricating oils, paraffine, aniline dyes, coal tar, 
vaseline, drugs of many kinds, and even the chief constitu- 

168 



MONOPOLIES AND TRUSTS 169 

ents of commercial rubber. A large concern can much more 
easily experiment with new methods and new by-products 
than a small one. 

These are the natural and legitimate savings of large scale 
production. The power of large capital also obtains for a 
great enterprise special privileges from state and local 
governments and from railroad and steamship companies. 
Companies and corporations producing on a large scale are 
enabled to undersell their competitors in one locality and 
crush them, while keeping up prices elsewhere. 

The advantages of large scale production are limited by 
the "Law of Diminishing Returns/ 7 and there is undoubt- 
edly a point of maximum efficiency in the unit of operation 
beyond which it will yield less than a proportionate return. 
In the steel industry it is estimated that this point of 
maximum efficiency can be attained by the investment of 
$30,000,000. This investment will give all the advantages 
of large scale production. 

Advantages of combination: But while such a concern as 
the Cambria Steel Company may be able to produce steel 
as cheaply as the United States Steel Corporation, the latter 
has many advantages due to the harmonious working 
together of many scattered units of operation. The advan- 
tages of the unit of maximum efficiency can be retained and 
the additional advantages of combining competing plants 
obtained. In the first place, fewer salesmen are needed. 
Where before the combination each establishment was 
obliged to maintain its staff of salesmen in all the cities in 
which its output was sold, under the combination, a single 
selling agency with its branches is entirely sufficient. The 
Distilling Company of America could thus dispense with the 
services of three hundred salesmen and save $1,000,000 
annually. 1 The American Steel and Wire Company retained 
only fifteen or twenty salesmen out of the force employed 
by the companies making the combination, "between two 
and three hundred men." 2 A similar saving can be made in 
advertising. 

^ Where the product is bulky and the freight cost relatively 
high, great advantages can often be effected by shipping 

1 Montague, Trusts of To-day, p. 48. 

2 Report of The Industrial Commission, Vol. I, p. 1018. 



170 ELEMENTS OF SOCIALISM 

to the consumer from the nearest plant, thus saving cross 
freights. Combination in production permits the strategic 
location of plants, from which distribution can be made with 
a minimum of waste. Mr. John W. Gates, of the American 
Steel and Wire Company, testifying before the Industrial 
Commission, said: "I should think that the cross freights 
would amount to half a million or a million dollars. It is 
a saving in that particular." 1 With their greater size and 
capital big concerns can maintain distributing stations in 
all parts of the country, shipping there in train-load lots 
and saving the additional cost of small shipments. 

In many industries in which combination has taken place 
there are great advantages due to the integration of allied 
industries. Before the organization of the United States 
Steel Corporation the manufacture of such finished products 
as tubes and tin plates was carried on by separate concerns 
which purchased the steel from other corporations engaged 
only in the production of the rougher steel products. The 
combination effected a saving by making all of the transfers 
of material from the iron mine to the final sale simply matters 
of bookkeeping. 

Where competition has brought into existence an excessive 
number of plants, the combination can dismantle and aban- 
don a large proportion of them with profit. An extreme 
example of this form of economy is found in the history of 
the so-called " Whiskey Trust.' * Eighty-one distilleries went 
into the original combination in 1887 and all but ten or 
twelve of the plants were closed soon afterward and pro- 
duction concentrated in the largest, best equipped and most 
conveniently located houses. 2 

By comparative accounting and demonstration as between 
plants, all can be kept up to the highest possible efficiency. 
A new form of competition is inaugurated between the 
superintendents and men of different plants for the turning 
out of the largest product at the lowest cost. 

Large scale production and monopoly: Monopoly strictly 
means that the total supply of the commodity in question is 
controlled by one person or group of persons. In practice 

1 Report of the Industrial Commission, Vol. I, p. 1030. 

2 Report of The Industrial Commission, Vol. I, p. 170. Testimony of 
C. C. Clark. 



MONOPOLIES AND TRUSTS 171 

the term is used to signify the control of so mucn of the 
supply that the market price can be fixed at the point of 
highest net return. A corporation controlling three-fourths 
of a given product can usually control the price, for the other 
producers could not supply the market if they tried, and 
the majority of purchasers must come to the large producer. 
Then it is always possible for such a concern to crush the 
others if they become too troublesome. Therefore, the small 
manufacturers generally agree to sell at the monopoly price. 

Neither large scale production nor combination, nor both 
together, necessarily constitute monopoly. Just before the 
organization of the United States Steel Corporation, there 
were several independent steel companies organized on a 
national scale, enjoying nearly all the benefits of large scale 
production and combination. In general the threat of price 
cutting brings all such competitors to an agreement which 
affects the consumers in practically the same manner as a 
monopolistic combination. 

Industrial monopoly is usually the result of the combina- 
tion of a number of small producers for the purpose of 
avoiding the evils of competition. Combination may be 
effected by outright purchase of one concern by another, by 
the leasing of the property of one by another, by the organ- 
ization of a new corporation to take over the business of two 
or more older concerns, or by means of the pool, the trust 
or the holding company. 

Monopoly may also result from a number of other causes. 
Chief among these are (a) control of the supply of raw 
material, such as coal and iron-ore deposits; (b) special 
advantages granted by the State, such as franchises, patents, 
trademarks, land grants, protective tariffs, and the like; 
(c) special advantages conferred by quasi-public action, such 
as preferential rates, rebates, exceptional transportation 
facilities, and the like, granted by railroad and steamship 
companies and other similar corporations. Then there are 
the monopolies which are commonly termed "natural monop- 
olies/ ' consisting mainly of public service enterprises, such 
as railroads, telegraphs, telephones, waterworks, gas and 
electric lighting and street railways. These are called natural 
monopolies because the conditions of their existence prac- 
tically preclude the possibility of effective competition. To 



172 ELEMENTS OF SOCIALISM 

duplicate any one of the public services named in any city 
would be too obviously wasteful to be tolerated. Competing 
water companies or competing street railway companies 
are not practicable. There is an apparent exception to this 
rule in the case of the telephone service, for in many cities 
there are competing companies. But here again the waste 
is so obvious, and the confusion and inconvenience necessarily 
arising from having to use two or more systems in order to 
get a full local telephone service so great, that the exception 
to the rule is more apparent than real. 

Monopolies in the United States : The pool, the legal trust 
and the holding company have been the forms which monop- 
olistic combination has assumed in the United States at 
different stages of its development. These three forms are all 
illustrated in the history of the oil industry. Previous to 
1874 the oil business in America was still in its infancy. Com- 
petition generally prevailed. Such attempts at agreement 
as the South Improvement Company (1871) and the National 
Refiners' Association (1872) completely failed to effect the 
object in view. In 1874 the principal refiners, of whom the 
members of the Standard Oil Company of Ohio were already 
the strongest, met and agreed to divide the markets among 
themselves and to abstain from all price cutting. This agree- 
ment, which became known as the Standard Alliance, was 
a pool. This pool was further strengthened by an exchange 
of stock among its members. 

In 1882 it was felt that the pool was too loose a form of 
organization and a new form was devised which became 
known as a trust. A board of nine trustees was chosen by 
the refiners and the stock of all the leading oil companies 
was deposited with them, the former stock-holders receiving 
in exchange trust certificates to the value of the stock they 
deposited. All dividends were then paid to the trustees and 
by them paid to the holders of trust certificates in proportion 
to their holdings. 

The trust was declared illegal under the common law by 
the Supreme Court of Ohio in 1892. Having ignored the or- 
der of the Court, it was attacked in contempt proceedings, 
after which the Standard Oil Company of New Jersey was char- 
tered in 1899 as a holding company with the power to hold 
and vote the stock of any oil company. The chief difference 



MONOPOLIES AND TRUSTS 173 

between this form and the trust was that the new form was 
regularly incorporated and had directors instead of trustees. 
The holding company is also commonly called a trust when 
it has monopoly power. 

Examples of all forms of combination are familiar to-day 
and the prices of a very large part of the necessities of life 
are fixed by monopolies at the point of highest net return. 

Advantages of monopoly: As lately as the middle of the 
nineteenth century it was thought that the limit of large 
scale production was reached when the owners of the business 
could no longer personally supervise the work of production. 
Now all is changed. The development of the great industrial 
corporation has removed the owner farther and farther from 
the process of manufacture. Whole great national industries 
are now controlled by gigantic corporations. Still others are 
monopolized in the form of pools and agreements for the 
regulation of price and output. 

The monopolistic combination has all the advantages of 
large scale production, such as saving in the purchase and 
sale of goods and the application of power, in labor, in organ- 
ization and the utilization of its by-products. It has also 
all the advantages of combination, such as saving in the 
number of salesmen, saving in cross freights, and concentra- 
tion at points of greatest advantage. Not only does it have 
these advantages in the highest degree, but it is able to con- 
trol the market for raw materials and finished products, to 
regulate the output according to demand, and fix the price 
at the point of highest net return. 

Monopolies arising out of franchises, patents, trademarks, 
land grants, protective tariffs, and other privileges granted 
by the State, or from the favoritism of other corporations 
have most of these advantages. Monopoly arising out of 
pure combination is almost always complicated by some 
alliance with these monopolies of privilege. It is practically 
impossible to consider them apart. For example, much of 
the strength of the United States Steel Corporation has 
come from protective tariffs, franchises and patent rights. 

Has competition been fairly tried? It has been asserted 
that monopoly is exclusively the result of these artificial 
conditions, and that the removal of the various forms of 
special privilege would destroy monopoly and make com- 



174 ELEMENTS OF SOCIALISM 

petition real. This is the position not only of the so-called 
Jeffersonian Democrat, but of the philosophical anarchist. 
But the J. & P. Coats Company, which practically controls 
the cotton thread market of the world, grew up in free trade 
England, and in the American and German combinations 
the growth of combination has not been confined to the 
industries which have received the greatest privileges. Pro- 
tective tariffs and other privileges have undeniably hastened 
the formation of monopoly, but the inherent advantages of 
monopolistic combination would of themselves be a sufficient 
and compelling reason for the development which has taken 
place. 

Competition is inherently self-destructive. Unchecked, it 
becomes a war to the death, ending in the ruin of the weaker 
competitors. Such cut-throat competition is usually checked, 
however, before this end is reached. Generally an agreement 
is reached which from the point of view of the public is 
virtually a combination. The Socialist contends that some 
form of monopoly is inevitable, and also that nothing short 
of a paralysis of the genius of a people will ever prevent 
them from availing themselves of all the advantages of large 
scale production, combination and monopoly. Whenever 
it becomes apparent that a decided gain will result from 
combination, nothing will be able to check the tendency 
toward monopoly. Upon no other hypothesis can we explain 
the persistence with which the great corporations have 
opposed all restrictive legislation, enlisting the ablest legal 
talent of the country in the work of devising ways and means 
of evading and defeating the object of such legislation as 
has been passed and preventing the adoption of still further 
restrictive measures. 

Restraint of trade: Monopolies and combinations have 
been attacked on the ground that they are contracts in 
restraint of trade. This term has undergone a decided 
transformation since combination assumed its present form. 
In the earlier common law restraint of trade meant the 
restraint of the freedom of carrying on one's personal voca- 
tion or trade. As early as the reign of Henry V of England 
an action was brought on a bond in which a dyer had con- 
tracted not to use his art in a certain city for a period of 
six months. The bond was declared void. Under modern 



MONOPOLIES AND TRUSTS 175 

conditions the common law is interpreted as restraining any 
interference with competition, if the restraint is injurious 
to one of the parties to the contract or is likely to result in 
injury to the public. Under the common law, then, any 
agreement to raise prices is invalid and criminal. The 
"trust" agreement has been held to be invalid; and a cor- 
poration which permits its stock to be deposited with a 
board of trustees for the purpose of avoiding competition 
is liable to the forfeiture of its charter. The cases Inder the 
common law have all been decided in the State courts, and 
it was generally possible for the defendant monopoly to 
reorganize in another State, where action would not be 
brought against it. 

The Sherman anti-trust law was passed in 1890, giving to 
the Federal courts jurisdiction in cases of restraint of trade 
where the trade in question was between states, between the 
United States and a foreign country, or in the District of 
Columbia. An attempt was made at the time to include in 
the law an exception in the case of "reasonable" restraint 
of trade, which was valid under the common law. But the 
amendment was rejected by Congress, and the law expressly 
states that "every contract, combination in the form of a 
trust or otherwise, or conspiracy in restraint of trade or 
commerce is . . . illegal." 1 

The law has been applied in a number of cases, and has 
been upheld as constitutional. In most of the cases tried 
under this law the net result has been that the form of com- 
bination has been altered without material change in fact. 
The law has been most effective when applied to labor 
organizations. In the decisions in the cases of the Standard 
Oil Company and the American Tobacco Company, in May, 
1911, the Supreme Court of the United States read into the 
law the exception which Congress had refused to include 
in it, so that the law now reads in effect "Every contract 
... in unreasonable restraint of trade ... is illegal." 

Thus monopolistic combinations as such are not forbidden, 
and it lies wholly within the province of the courts to deter- 
mine whether any particular combination is injurious to the 
public or to any of its members. 

Present status of monopoly: The fact of monopoly was 

1 U. S. Comp. Stat., 1901, p. 3200. 



176 ELEMENTS OF SOCIALISM 

not in the least affected by the Supreme Court decisions in 
the Standard Oil and Tobacco cases in May, 1911. The 
holding corporation as such was not declared illegal. The 
stock of the corporation maintained the same high price as 
before. The Sherman Act has failed to bring about competi- 
tion in the place of monopoly. Monopolies may continue 
as before with such slight modifications and changes in 
their form of organization as the courts may suggest. The 
control of industry is even easier than before, because there 
is no longer any uncertainty as to the application of the law. 

Regulation of monopoly : The only method of coping with 
the evils of monopoly left to those who oppose public monop- 
oly is that of regulation by the State. Those who urge this 
method argue that as the corporation is a creature of the 
State, an artificial person, the State is in a special sense 
responsible for it. The form of regulation which offers the 
greatest promise and is most generally advocated is federal 
incorporation of concerns doing an interstate business, with 
the right to regulate prices exercised by a commission sim- 
ilar to the Interstate Commerce Commission, which has the 
power to regulate railway rates. Federal incorporation is 
advocated by President Taft, and Judge Gary of the United 
States Steel Corporation has expressed his willingness to 
have the Government fix prices in such a way as to guarantee 
good dividends to the stock-holders. 

Such regulation will probably be extensively tried, and the 
trial will mean that the theory of the possibility of conduct- 
ing industry upon a competitive basis is definitely abandoned. 
The question of regulation will then resolve itself into a test of 
strength between the industrial State and the political State. 
If the industrial State with its plutocracy is able to dictate 
to the political State and control the commission charged 
with the task of regulating the corporations, then dividends 
will continue to be paid on watered stock, prices will still 
remain at the point of highest net return and the corpora- 
tions will be more safely entrenched than before. 

The Socialist view of State regulation : From the Socialist 
point of view, the objections to regulation are its inherent 
wastefulness, its bureaucratic nature and its ineffectiveness. 

(1) Regulation is inherently uneconomical in that prac- 
tically all the labor it involves is unproductive and unneces- 



MONOPOLIES AND TRUSTS 177 

sary, or, at least, only necessary to avoid the evils of a 
defective system which might be replaced by a better one. 
Regulation really means that, in addition to the social labor 
necessary to production society must, through the State, 
expend still further social labor, simply to compel the monop- 
olist to observe the rules which society in the exercise of its 
sovereignty has decided shall govern production. These 
rules the monopolist is constantly tempted to break, because 
at every turn they hamper him in his effort to gather profits. 
No one has yet made a serious and exhaustive study of this 
question and attempted to compute the cost to the nation 
of the measure of regulation we have already tried. That 
the sum would be enormous if computed is evident. Take 
the regulation of railroads, for example: the cost of all the 
federal and state legislation enacted for the purpose of 
regulating the railroads, its interpretation by the state and 
federal courts in the almost innumerable conflicts which have 
arisen under it, of the army of persons and the costly machin- 
ery of government employed in its enforcement, including 
such expensive agencies as the Interstate Commerce Com- 
mission, must all be reckoned. All this expense is incurred 
in order that we may retain private monopoly and at the 
same time protect ourselves against its worst evils. The 
true cost of railway service to the people is not the amount 
they pay to the railroad companies, but that amount plus 
what they spend in "regulating" the ra ways. 

(2) The natural and instinctive tendency of the monopolist 
is to strive to evade all restrictions imposed upon him which 
in any manner interfere with his profits. To make the regula- 
tions adopted effective, it is necessary to demand from the 
monopolist a vast amount of nformation concerning his 
business. To be of any service this nformation must be 
examined, tabulated and checked — for which work the main- 
tenance of an expensive bureau is necessary. To detect and 
frustrate attempts to evade the law, and to punish violations 
of the law, inspectors, detectives, attorneys and prosecutors 
must be employed in large numbers. As a result of this 
organized interference with business and business methods 
by the State we have developed a bureaucratic form of 
government very different from the simple democratic form 
of government which formerly prevailed. 



178 ELEMENTS OF SOCIALISM 

(3) Regulation must ultimately fail for the reason that 
the gain to the monopolist which evasion or violation of the 
regulations imposed upon him, when it can be accomplished 
with safety, is an incentive against which the State is unable 
to contend successfully. It is the same principle which 
makes it almost impossible for the authorities to prevent 
the sale of liquor in a prohibition state. So long as the State 
permits the private monopolist to exist, it can accomplish 
little of permanent value by imposing restrictions upon him 
which make it impossible for him to obtain the profits he 
would otherwise receive. He will bribe the State's officials 
where possible, and secure immunity while he violates the 
law. Where that is impossible, he will engage the brightest 
and ablest minds in the nation to make a way whereby the 
forbidden fruit can be obtained. Thus the State must always 
be in the position of having many of the ablest and keenest 
minds devoted to the special task of outwitting it. At best, 
regulation thus becomes a war between the social organiza- 
tion, the State, and a class of monopolists. 

Private versus public monopoly: Private monopoly is 
universally dreaded, and justly so. Monopoly gives power 
which it is not safe to entrust to any group of men in a 
commonwealth. It is essentially oligarchic, the rule of the 
many by the few. This is true regardless of the number of 
stockholders. The United States Steel Corporation may have 
forty thousand stockholders, but the real power of the con- 
cern is vested in a small group of financiers as surely as if 
they owned all of the stock themselves. Such great con- 
centration of power is destructive of personal liberty, the 
freedom of speech and the press, of political democracy itself. 
Its destructive work is done in subtle and insidious ways. 
Churches and colleges are often bribed with gifts to become 
the defenders and apologists of plutocracy. Ministers and 
teachers are rarely purchased directly, but they are supported 
financially, praised and promoted in proportion to their faith 
in and devotion to the existing order. 

Under monopoly, prices are always fixed at the point of 
the highest net return. In this sense, monopoly-price is 
always high price. "Get out of the consumer all that you 
can" is the motto of monopoly. Only thus can Standard Oil 
pay forty per cent, dividends and American Tobacco twenty- 



MONOPOLIES AND TRUSTS 179 

five per cent, when the current rate of in terestis less than 
five per cent. Other monopolies pay similarly high dividends 
but conceal them by means of over-capitalization. But while 
monopoly-price is high price in the sense defined, it does not 
follow that under monopoly the consumer has to pay higher 
prices for the commodities he consumes than he would have to 
pay if competitive methods prevailed. Sometimes, indeed, 
the reverse is true. By fixing the price of commodities at the 
point of the highest net return is meant fixing the price at 
the level which gives the maximum of profit upon the whole 
output, rather than upon the unit commodity. Thus, more 
profit can be made by selling a large number of pins at five 
cents a package than could be made by selling a very much 
smaller number at ten cents. Regardless of other factors, 
monopoly always determines prices according to this rule. 
Sometimes, owing to economies in production, it can reap 
enormous profits while maintaining prices at a level which 
under competition would have left only a very narrow 
margin of profit. Thus, while the Distilling and Cattle 
Feeding Company raised prices, the Standard Oil Company, 
on the other hand, steadily reduced the price of oil and 
other products. The Sugar Trust, while it raised prices 
above the level reached during the period of relentless cut- 
throat competition which ruined nearly fifty per cent, of the 
independent refiners before the American Sugar Refining 
Company was formed, still did not raise them to the high 
level maintained for a long period at an earlier stage of the 
competitive era of the industry. On the whole, however, 
it is safe to conclude with Prof. Jenks, that monopolistic 
combinations have with practical uniformity either main- 
tained or raised prices. 1 

Potential good in monopoly: But while private monopoly 
is admittedly fraught with danger to the public welfare, it 
would be a mistake to regard it as other than a step in the 
direction of a saner and juster industrial economy. Great 
as are its disadvantages, its potential advantages are equally 
great. The elimination of wasteful and anarchical methods 
is in itself a good and desirable thing: what is wrong is the 
fact that the resulting benefits are enjoyed by the few and 
not by society as a whole. There has been some positive 

l J. W. Jenks, N. Amer. Review, June, 1901. 



180 ELEMENTS OF SOCIALISM 

social gain in that the monopolization of industry has been 
largely accompanied by a modernizing of plants, large, well- 
ventilated factories taking the place of dingy, unsanitary 
sweatshops and factories. Despite the revelations of condi- 
tions in the Pittsburgh steel mills made by the investigators 
of the Sage Foundation, this is generally true of all industry 
which has passed from competition to monopoly. 

From a Socialist viewpoint, then, indiscriminate abuse of 
monopoly is unwise and unscientific. The Socialist regards 
monopoly as a necessary step in the evolution of industry 
from wasteful and injurious competition to a social monopoly 
with all its benefits socially enjoyed. According to this 
view, social monopoly is at once the next step in evolution 
and the solution of the so-called Trust Problem. 

Public ownership : The greatest progress in public owner- 
ship has been made by municipalities. It usually begins 
with the water supply. Municipal ownership of the water 
supply system is very general in Europe. Even in the United 
States, where municipal ownership has made less progress 
than in Europe, sixty per cent, of the water systems are 
municipally owned and operated. Other public services, 
such as gas, electric light, power and heat plants and street 
railways, remain for the most part in private hands on this 
side of the Atlantic. In Great Britain, on the other hand, 
more than half the gas consumed is supplied by municipalities 
owning and operating their own systems. Experience has 
demonstrated the superiority of public enterprise over 
private enterprise in this important service. Comparing 
cities of the same size, it is a notable fact that in those cities 
where the gas supply is privately owned and operated, only 
about half as many people per 1,000 of population use gas 
as where the service has been municipalized. The average 
price of gas per 1,000 cubic feet is lower under public than 
under private ownership. Nor are these the only advantages. 
As a rule, the wages of the workers employed in municipally 
owned gas-works are higher than those of similar workers 
employed by private companies, and their hours of labor 
are less. The service is more efficient and complaints are 
more readily adjusted. It has been found that the municipal 
administration is generally more progressive than the 
private company and more ready to adopt new inventions 



MONOPOLIES AND TRUSTS 181 

and improvements. In addition to these very substantial 
benefits, the net earnings of the municipal undertakings are 
considerable, and in many cities large sums are applied from 
these earnings to the reduction of taxation or to the cost of 
new improvements. Manchester, for example, devotes more 
than $600,000 a year to the reduction of taxation from the 
net profits of its gas supply. 

Another public service which in American cities remains 
almost entirely in private hands, while in Great Britain it is 
largely municipalized, is local transportation. Practically 
every large city in Great Britain owns and operates its own 
street railways, or is preparing to do so. Also, nearly every 
large city owns and operates its electric lighting system, 
and more than half the capital invested in this industry in 
Great Britain represents municipal undertakings. In both 
these services municipal ownership results in benefits simi- 
lar to those enumerated in connection with the gas sup- 
ply. Naturally, these advantages have given a great impetus 
to public ownership in Great Britain. Glasgow and several 
other cities have municipal telephone systems. Colchester 
has an oyster fishery. Many of the large cities conduct 
farms in connection with the disposal of their sewage, instead 
of wasting the sewage and polluting lakes and rivers as is too 
often done in this country. Birmingham, for example, sells 
enough stock, wool, crops and other farm products to yield 
a revenue of $125,000 a year. 

In addition to all the advantages enumerated, public 
ownership tends to prevent graft and political corruption. 
This is almost self-evident, despite the frequency of the 
argument that the extension of public ownership would 
make graft more general. Every careful investigation of the 
causes of graft and political corruption in American cities 
has traced these evils to two main sources, the granting of 
franchises and the letting of contracts. When an Alderman 
is paid for his vote by a franchise-seeking corporation it is 
evident that public government is corrupted by private 
monopoly. It cannot be denied that the desire and effort 
of private monopoly to exploit society and make a profit 
out of its needs is the main cause of graft and corruption 
in our municipal politics. The remedy for this is to supplant 
private monopoly by social monopoly. It will be seen, then, 



182 ELEMENTS OF SOCIALISM 

that the arguments for public ownership, even under the 
present system, are numerous and strong. 

State Socialism: The extension of government ownership 
and State interference with industry, unaccompanied by any 
change in existing class relations or increase in the power 
of the people as against the power of capital, is sometimes 
called State Socialism. The term is not a felicitious one. 
Many Socialists object to its use and urge the use of the 
term "State Capitalism'' as being more accurate — on the 
ground that the State simply takes the place of the individual 
capitalist or the corporation, and carries on industry in the 
old manner without any material change. The term State 
Socialism is here used with this explanation. 

Every country has a certain amount of State Socialism. 
The postal service is a government monopoly in every 
civilized country. So are the coinage of money and the light- 
house and life-saving services with few exceptions. Most 
countries except the United States own and operate the 
telegraph and telephone services in connection with the 
postal system. State insurance against sickness, accident 
and old age is common. Prussia and Italy own the railroads 
within their borders. Switzerland owns all its water power. 
France has a monopoly of tobacco and Sweden of alcoholic 
liquors. Japan has gone far along the path of State Social- 
ism, owning railroads, telegraphs and many manufacturing 
monopolies. Australia and New Zealand have gone even 
further in the direction of State Socialism and are also more 
democratically organized than the other countries named 
with the single exception of Switzerland. 

However desirable State Socialism may be as a corrective 
of some of the worst evils of competition, or of private 
monopoly, it cannot be regarded as a solution of the social 
problem. The fundamental criticisms which are made 
against the industrial system in countries where private 
ownership is more general are made against the industrial 
system in countries having the largest measure of State 
Socialism. The same class distinctions exist, the class 
struggle continues, the proletariat still gets only a wage 
determined by competition in the labor market and lives 
near the poverty line, the capitalist is lord of the industrial 
State and through the power thus acquired becomes directly 



MONOPOLIES AND TRUSTS 183 

the ruler of the political State. State ownership is not only 
not Socialism, but it is not of necessity a step toward it. 
The failure of State Socialism to do away with poverty 
and other evils is therefore not a valid argument against 
Socialism. In general, however, Socialists favor the exten- 
sion of government ownership. They look upon it as the 
development within the capitalist order of the political and 
industrial forms which the proletariat will some day inherit 
and transform into the Socialist State. 



184 ELEMENTS OF SOCIALISM 

SUMMARY 

1. Large scale production saves in the purchase of raw materials 
in the marketing of the product, in the application of power, in labor, 
and in the utilization of by-products. 

2. Combination saves in the cost of salesmen, in the elimination of 
cross-freights, in the elimination of poorly located plants and in com- 
parative accounting and demonstration. 

3. Monopolistic combinations embody the advantages of large scale 
production and combination with the power to control markets and 
prices. 

4. Monopoly in spite of its dangers is a distinct forward step and is 
an inevitable feature of modern industrial conditions. 

5. Socialists regard State regulation of monopoly as wasteful, bureau- 
cratic and ineffective. 

6. The public ownership of public service utilities and "State Social- 
ism " have distinct advantages, but cannot be regarded as solutions 
of the social problem. 

QUESTIONS 

1. What are the specific advantages of large scale production? 
Of combination? Of monopoly? 

2. What have been the usual forms of monopolistic combination in 
the United States? 

3. What are natural monopolies? Why are they so called? 

4. What is meant by the " Doctrine of restraint of trade"? 

5. Why do Socialists regard State regulation as likely to fail? 

6. How may monopoly benefit the consumer? 

7. What are the advantages of the public ownership of traction 
facilities? What are the objections to public ownership? 

8. To what extent do we have " State Socialism" in the United 
States? 

Literature 

Ely, R. T., Monopolies and Trusts. 

Howe, F. C, The City, the Hope of Democracy, Chap. IX. 

Jenks, J. W., The Trust Problem. 

Report of the United States Industrial Commission, Vol. I. 

Ripley, W. Z. (editor), Trusts, Pools and Corporations. 

Shaw, Albert, Municipal Government in Great Britain. 

Tarbell, Ida M., History of the Standard Oil Company. 



i 



PART III 

THE SOCIALIST IDEAL 






! 



CHAPTER XVI 

THE UTOPIAN SOCIALIST IDEAL 

The ideal of perfection: In every age of civilization there 
have always been idealists who, realizing the imperfections 
and injustices of the world as it is, have endeavored to 
formulate their conceptions of the world as it ought to be. 
Mankind has always had a weakness for these beautiful 
pictures of a perfected world, and many of them have given 
rise to sects and societies working for the realization of the 
ideal. The picture drawn is usually nothing more than the 
literary expression of the author's dreams, without any 
intention of starting a movement or a revolution. Its in- 
fluence in bringing about social changes depends upon the 
social and economic conditions existing at the time in the 
land of its origin. The Utopian ideal frequently merges 
imperceptibly into the concept of a future life beyond the 
grave, and in writings of a mystical type it is sometimes 
difficult to tell which is meant, the earthly paradise of the 
future or the paradise in which dwell the spirits of the blessed 
dead. 

The Utopias present themselves to us in almost infinite 
variety and they form one of the most interesting chapters 
in the world's literature. It will be impossible for us to 
do more than notice briefly a few of the most important of 
these pictures and the movements which have followed 
them. 

Ancient Utopias: One of the first definite pictures of an 
ideal world is the Republic of Plato, one of the great master- 
pieces of literature. It is remarkable that even the great 
Athenian philosopher could not conceive of a society which 
was much more than the Athens he knew and loved with 
the more obvious defects removed. Communism still existed 
to a very large extent in Athens, but only within the limited 
cultured class. Beneath were the slaves, who far out- 

187 



188 ELEMENTS OF SOCIALISM 

numbered the citizens and by their labor gave to the Athe- 
nians the leisure to develop their culture. The wife was only 
a sort of superior domestic slave without personality of her 
own. So Plato extends the idea of communism in the 
Republic, introduces community of wives and children, and 
founds his whole ideal state upon slavery. Thus the Republic 
was little more than a description of the then existing Athens 
idealized. Although there are many features of this Utopia 
which are repulsive to the mind of the twentieth century, 
it undoubtedly pictured for the Athenian of Plato's day a 
higher and nobler ideal than he had heretofore known. 

The Republic was written in the midst of the most wonder- 
ful civilization of antiquity by one of its greatest philosophers. 
Three centuries later, amid the ruins of an idealistic civiliza- 
tion which had been paralyzed by the moral degeneracy of 
its ruling class and crushed by foreign military power, a 
man of the people began to preach the ideal of a perfected 
and regenerated state on earth blended with the ideal of 
another life of bliss beyond the grave. His preaching and 
tragic death brought about the formation of an organized 
group which, in the face of relentless persecution and martyr- 
dom, carried on the Master's preaching and laid the founda- 
tions of organized Christianity, the most influential of all 
world movements. It is especially noteworthy that this 
movement was in its origin essentially communistic, for it 
is recorded that "all that believed were together, and had 
all things common; and they sold their possessions and 
goods, and parted them to all, according as any man had 
need." 1 And again, "not one of them said that aught of the 
things he possessed was his own; but they had all things 
common." 2 From the point of view of its influence upon 
the lives of men no other Utopian ideal can rank with the 
"Kingdom" which Jesus proclaimed. 

Sir Thomas More and his "Utopia": The work which 
has given its name to all speculations as to a perfect society 
had its origin in the social unrest of England during the 
Reformation period, and was written by a man who as Lord 
Chancellor of England disagreed with his royal master, 
Henry VIII, and paid the penalty on the scaffold. Its 

1 The Acts, chap, ii, 44. 

2 Idem, chap, iv, 32. 



THE UTOPIAN SOCIALIST IDEAL 189 

literary form has been very generally followed in the later 
Utopias. 

Until the Great Plague of 1348-49, which killed half the 
population of England, agricultural interests were still of 
first importance, and the manorial system still prevailed. 
After the plague there was a scarcity of labor and wages rose 
rapidly until parliament passed the "Statute of Laborers/' 
fixing wages at the rate which had prevailed before the 
plague. This resulted in the Peasants' Revolt of 1381, and 
a partial victory for the laborers. As the towns grew and 
the woollen trade became more important, the landlords 
enclosed the manorial lands and became sheep raisers, thus 
dispensing with the services of a large part of the trouble- 
some laboring class, dispossessing them from their homes 
and driving them into the towns to become common laborers, 
or, in many cases, reducing them to vagabondage, crime and 
beggary. It was the natural hardship of the transition 
period between the old and the new, but More saw only the 
distress of the people and demanded a return to the happy 
days of the agricultural stage. 

The Utopia (1516) "contains the criticism of a great 
philosopher on the industrial and social changes marking 
the opening of the age of capitalism." 1 The criticism of 
early sixteenth century society takes the form of a contrast 
of the ideal commonwealth "Utopia," which is supposed 
to have been visited by an explorer in the recently discovered 
New World. More points out the growing contrast between 
the rich and the poor in England, the evils of low wages 
and the oppression of class by class. He attacks property 
rights in all forms, and condemns evil conditions whether in 
State, church, or in the hearts of individuals. The con- 
demnation of the rich parasites and their "retainers and 
loitering serving men/' the charge that private property 
gives rise to crime, which is chiefly committed against 
property, and the scathing denunciation of war and mili- 
tarism, all sound very much like the social criticism of 
to-day. 

In Utopia these evils do not exist. Property is held in 
common, "every family maketh its own garments," six 
hours a day are given to labor and there is no exploitation, 

1 Socialism Before the French Revolution, by W. B. Guthrie, p. 92. 



190 ELEMENTS OF SOCIALISM 

all able-bodied persons work, even women and the clergy. 
Monogamous marriage exists, regulated by the State for the 
good of society; money does not exist, and gold is put to 
base uses; the government is an absolute monarchy, but the 
monarch is elected by the people. 

The Utopia did not give rise to any sect, party or move- 
ment, but the beauty of the ideal and the perfection of its 
literary dress have made it one of the immortal masterpieces 
of literature. As such it has had a great and beneficent 
influence during nearly four hundred years. 

Utopias of the seventeenth and eighteenth centuries: In 
the two centuries after the time of More a number of note- 
worthy Utopias were written. Tommaso Campanella, a Cala- 
brian monk, wrote The City of the Sun (1623), a fanciful 
work which is believed to have inspired the Jesuits to under- 
take their communistic experiments in Paraguay. His work 
is in many respects similar to Plato's Republic. His ideal 
involves communism in goods and wives, but slavery is 
prohibited and work is common to all. A contemporary of 
Campanella, Francis Bacon, statesman and philosopher, 
wrote the New Atlantis (1627), a distinctly philosophical 
romance. The work is a romantic description of an imaginary 
ideal State in which the happiness of the people is attained 
by means of the political machinery under State guidance. 
In a sense the work is incomplete, for the author did not 
live to fulfil his intention of publishing a complete model 
of the laws necessary for such a commonwealth. James 
Harrington's Oceana (1656) was written during the period 
of the author's self-imposed seclusion following the execu- 
tion of his friend, Charles I. Half romance and half treatise, 
its style was probably suggested by More's great work, but 
the ideal which it presents is a very different one. Harring- 
ton is first of all a republican. The rulers of ideal common- 
wealth are all elected by the people, by ballot, the term of 
office being three years. The Senate discusses and debates 
laws, the people decide upon their adoption and rejection, 
and the elected magistrates execute them. Private property, 
as such, is not interfered with, but landed property, being the 
most important form of property, the one which confers 
greatest power, is so distributed that no one person can 
obtain more than a certain fixed revenue from it. After the 



THE UTOPIAN SOCIALIST IDEAL 191 

Restoration of Charles II, Harrington was imprisoned in the 
Tower of London for treason. Morelly in the next century 
with his Basiliade (1753) and Code de la Nature (1755), 
marked a distinct advance in the direction of modern thought. 
For the former work he adopted the medium of fiction 
usually chosen by Utopians, but the latter work is a treatise, 
frankly analytical and philosophical in form. He had a pro- 
found influence in forming the social theories of the French 
Revolution. The period of the Revolution itself gave rise 
to many Utopias, of which those of Boissel, Babeuf and 
Barnave are the best known. 

Saint-Simon: We come now to that remarkable group of 
Utopians, Saint-Simon, Fourier, Owen and Cabet, whose 
influence upon the Socialist movement as we now conceive 
it was by no means small. The first of these, Count Henri 
de Saint-Simon, was born in 1760, and lived through the 
stirring times of the reign of Louis XVI, the Revolution and 
the First Republic, studying and experimenting. His first 
published work appeared in 1802, but it was not until 1817, 
in L J Industrie, that he began to teach his views in regard 
to society. The best expression of his theory, however, is 
contained in Le Nouveau Christianisme, published in 1825. 
It was this work which first aroused the interest of Karl 
Marx in the subject of Socialism. 

The recent Revolution and the economic conditions of the 
Restoration gave Saint-Simon the basis for his theories. 
He believed that the goal of social activity is "the exploita- 
tion of the globe by association/' In some respects he comes 
remarkably near to the viewpoint of the later scientific 
Socialists. For example, the idea that political questions 
and political institutions are based' on economics appears in 
L' Industrie, where he points out that politics is really after 
all nothing but the science of production and foretells the 
future complete absorption of politics by economics. While 
he had nothing like a conception of the theory of class struggles 
in the modern Socialist sense, at times he came very close 
to it. In his very first work he insisted that the French 
Revolution was essentially a class war, and that the Reign 
of Terror was the reign of the non-possessing masses. His 
concern is always for the workers, "the class that is the most 
numerous and the most poor." Still, his perception of class 



192 



ELEMENTS OF SOCIALISM 



antagonisms is not deep enough to prevent him from building 
his Utopia around the idea that the bankers, merchants, 
manufacturers, and other sections of the bourgeoisie will 
become at once servants of the whole of society, divested 
of their class feelings and interests. This is not remarkable 
in view of the fact that modern industry was only beginning 
in France when Saint-Simon wrote, but the fact marks his 
whole thought as essentially Utopian. The religious side 
of Saint-Simonism is important, if mystical. The existing 
forms of religion are all to be abolished, and a new ethical 
order founded upon the teachings of Jesus, having for its 
object the amelioration of the conditions of the poor. After 
his death Saint-Simon's teachings were taken up by a band 
of devoted disciples, but vain and fanatical leadership 
demoralized the movement, and it became the prey of 
freaks who dragged it into the mire and thoroughly dis- 
credited it. 

Fourier : The work of Charles Fourier was much more far- 
reaching in its influence than that of Saint-Simon. Fourier 
was born at Besangon, France, in 1772. He was the son of 
a wealthy merchant and received a legacy of about 80,000 
francs upon the death of his father in 1781. It is said that 
he lost practically the entire sum during the siege of Lyons 
in 1793. In 1812 he received a second legacy from his 
mother's estate, which yielded him an income of about 900 
francs a year, and this enabled him to abandon commerce 
and devote himself to the study of social problems. In 
1803 his first work appeared, an essay in which Fourier 
developed the idea that in order to have universal peace 
it was necessary to establish a universal empire. Fourier's 
social theories are contained in the following works: The 
Theory of the Four Movements and of the General Destinies, 
1808; Treatise of Domestic and Agricultural Association, 
or Theory of Universal Harmony, 1822; New Industrial 
World, 1829; False Industry and Its Antidote, Natural, 
Attractive Industry, 1835. 

Fourier differs from all the other Utopians in that he does 
not make his appeal to the sentiments of men, but to their 
material interests. He does not condemn society because of 
the sufferings it inflicts upon the poor, but upon the waste- 
fulness and anarchy of production. His cry is for "Order" 



THE UTOPIAN SOCIALIST IDEAL 193 

and "Harmony," not for "Justice" or "Fraternity." That 
happiness for all mankind would result from this social order 
Fourier believed, and so much was implied in all his teach- 
ing. But it was not his primary concern. Like Saint-Simon, 
he was essentially religious and his theories were closely 
related to his religious conceptions. But his religion is very 
unlike Saint-Simon's: it is more philosophical and less hu- 
manitarian and emotional. He regards the whole universe 
as God's harmonious creation. Its wonderful harmony 
impressed him as the model man ought to copy in his social 
arrangements. God never wasted effort and therefore the 
passions and instincts with which man was endowed were 
meant by God to be used. Every human passion, therefore, 
must have its place, and only that society is worthy which 
offers full opportunity for their free exercise. 

Such is Fourier's philosophy, briefly stated. Upon it he 
rests the most elaborate scheme ever devised by any Utopian 
writer, and that fact makes all the more remarkable the great 
vogue it obtained. It is impossible here to do more than 
outline the main features of Fourier's system. The social 
unit is the Phalanx, not the State as with Saint-Simon and 
most of his predecessors. The normal Phalanx consists of 
four hundred families, or eighteen hundred persons, living on 
a square league of land, self-contained and self-supporting. 
This Phalanx provides its members with every opportunity 
for the free development of the most varied likings and 
capacities. The principal edifice, the communal dwelling, 
is a Palace, which Fourier describes in great detail. It con- 
sists of a double line of continuous buildings, about 2,200 feet 
in length. There are dining-halls, study rooms, a library, 
workshops for noisier occupants — far removed from the 
quiet centre — a hotel with apartments for strangers, and the 
apartments of the members are so varied as to meet every 
individual need and preference. The various phalanges are 
ultimately to form a great federation with a capital at 
Constantinople. The chief ruler of the world will then be 
the Omniarch, and he will be assisted by three Augusts, 
twelve Cesarinas, forty-eight Empresses, 144 Kalifs, 576 
Sultans, and so on. 

An essential feature of his system was the emphasis placed 
upon the education of children. Give useful vent to every 



194 ELEMENTS OF SOCIALISM 

passion and desire, he reasoned, and all will be well. Children 
love to play in the dirt, for example, therefore the passion 
must be given free play. But it should not be wasted. The 
children can be organized into "little hordes' ' to remove the 
dirt from around the Palace — a rather queer anticipation of 
the boys' street cleaning brigades of some of our cities. There 
is nothing of communism in Fourier's scheme. The property 
of the Phalanx is to be held by stockholders. It is not 
necessary to hold stock in order to be a member, nor need 
one be a member in order to become a stockholder. Every 
member must labor at rates fixed by the council. At the 
end of the year an inventory is made and the profits are 
divided — five-twelfths to labor, four-twelfths to capital, 
three-twelfths to skill or talent. 

But the most fantastic part of Fourier's system is his theory 
of cosmogony. As one reads it to-day it is impossible not 
to marvel that so many brilliant minds were attracted by 
Fourierism. The life of each planet, including the earth, 
is 80,000 years. The period of infancy is 5,000 years, that 
of ascending development 35,000 years, that of descending 
development 35,000 years, that of senility 5,000 years. 
Within the life of the earth the human race must pass through 
thirty-two periods. We are now in the fifth period, civiliza- 
tion. The eighth period will be that of Harmony and will 
bring complete happiness. Then there will develop a "polar 
crown," which will revolutionize the globe. The ice will 
disappear from the arctic circles and there will be no torrid 
zone, for climate will be equal all over the world. Wild 
beasts will disappear and new animals, useful to man, will 
take their place. Even the water of the ocean will acquire 
a new use — it will become lemonade, so that he who desires 
to quench his thirst need never want. 

Fourier's relation to Socialism: Such were the teachings 
of the man whose most brilliant disciples were to be found 
here in the New World, where his social system received its 
most important trials. What, it may well be asked, have 
these theories to do with Socialism — how does Fourier enter 
into the history of the movement at all? In the first place, 
Fourier is not in a true sense of the term a Socialist. His 
basic idea is rather that of establishing harmony between 
labor and capital. He comes near to the modern scientific 



THE UTOPIAN SOCIALIST IDEAL 195 

Socialists in one respect, namely, in his criticism of existing 
society. With rare literary charm he satirizes the bourgeoisie 
in a manner which makes one wonder that so keen a satirist 
should manifest so small a sense of humor. His criticism 
of the position of woman is most masterly. It is to him 
we owe the idea that the degree of woman's emancipation is 
the best measure of the general emancipation of any society. 
Then, too, Fourier's conception of social evolution, and his 
division of the history of mankind into epochs, is an inter- 
esting anticipation of the evolutionary basis of modern 
Socialism. Finally, as one of the last of those great move- 
ments for the remolding of society to conform to an abstract 
principle, it must be considered in any study of the develop- 
ment of the Utopian tendency to the point where it loses 
itself in the new movements of science. 

Robert Owen: By far the greatest of this group of Utopi- 
ans is Robert Owen, sometimes called the "Father of Modern 
Socialism/' Born in 1771, of poor parents, Owen was one 
of those who acquired a fortune out of the commercial mael- 
strom which attended the birth of the Industrial Revolution 
in the series of inventions that culminated with Watt's 
steam engine and Cartwright's power loom. While he was 
yet in his teens Owen rose to a prominent position as a manu- 
facturer. He saw the appalling misery and poverty which 
attended the new industrial regime, and was especially 
struck by the terrible suffering of little child workers, who, 
from the age of five, were compelled to work as many as 
fourteen hours out of the twenty-four, by night as well as 
by day, and subjected to almost incredible cruelty and 
hardship. Owen began an agitation in Manchester which 
led to the passing of the first factory act, in 1802, by the 
Peel ministry. 

Owen is best known by the Utopian experiments he made 
at various times and places, of which New Lanark, Scot- 
land, and New Harmony, in the State of Indiana, are the 
most important. The first of these was an example of 
paternalism, a sort of "benevolent feudalism"; the second 
was an example of modified communism. Owen went to 
New Lanark on the opening day of the nineteenth century 
to assume the management of a large cotton mill, of which 
he was part owner. The factory employed more than two 



196 ELEMENTS OF SOCIALISM 

thousand persons, and was widely known as "the best 
regulated factory in the world.' ' But even here Owen found 
conditions so bad as to be positively revolting, and at once 
set himself to the task of improving them. He established 
infant schools, among the very first of their kind, and set 
apart certain hours in the afternoon for the instruction of 
the child-laborers. Prior to his coming children of five and 
six years of age were employed from six in the morning to 
seven in the evening and then compelled to go to school. 
He shortened the hours of labor for all employees, raised 
wages, introduced sanitary reforms, relieved the workers 
from the clutches of unscrupulous traders who exploited 
them shamefully through a vicious credit system, establish- 
ing a store to supply them with goods at cost and making 
payment of wages more frequent. In short, all that phi- 
lanthropy could devise or suggest was attempted. New 
Lanark acquired a world-wide reputation as the centre of 
the greatest social experiments in history. Distinguished 
men from all parts of the world visited the place and with 
a unanimity that is a rare tribute to Owen's skill and sincerity 
praised it highly. Again and again Owen was forced to 
make great financial sacrifices and change partners. Al- 
though the business paid handsomely, there was almost 
invariably an objection by his partners to the expenditure 
of so much money upon what they could not but consider 
a foolish object. For twenty-nine years Owen kept up the 
New Lanark work and then turned to the advocacy of com- 
munism, the second phase of his social career. 

At New Lanark, through his educational experiments, 
Owen had become impressed with the idea that human 
character is largely formed by and dependent upon environ- 
ment. This he made the basis of an educational propaganda 
that was very far-reaching, and that drew forth the most 
bitter attacks by those who regarded his assault on the 
doctrine of the freedom of the will as an attack upon all that 
religion meant. In 1817, when the British government was 
discussing the best means of remedying the frightful distress 
of the period, Owen proposed a plan, the essential feature of 
which was that the government should establish commu- 
nistic villages. From this time onward he gradually lost 
interest in mere philanthropy. He wrote and lectured 



THE UTOPIAN SOCIALIST IDEAL 197 

incessantly, advocating the establishment of cooperative 
communities. Like Fourier, whose work he always claimed 
to have to a large extent inspired, Owen hoped for a great 
federation of the world to come from these communities. 
His ideal is cooperative industry with perfect equality 
between the sexes. To the establishment of cooperative 
"colonies" Owen devoted nearly all of his large fortune. 
Of these experiments that of New Harmony was the most 
important, alike as regards size and influence. 

Owen did not write a work analogous to the romance of 
More. His theories and ideas are stated in a formidable array 
of pamphlets, manifestos, lectures, debates and philosophical 
treatises. Toward the end of his life, when his mind had 
already become feeble, Owen brought much discredit upon 
his ideas by his own eccentric conduct. But if we take his 
life as a whole, up to the point where his mental grasp be- 
comes weak, we see a singularly noble and unselfish character, 
devoted with a courage and an enthusiasm that are rare 
to the welfare of humanity. His practical achievements 
were by no means small. He laid the foundation of England's 
factory legislation; he started infant schools; he directly 
inspired the great cooperative movement, for the Rochdale 
movement was the result of the success of New Lanark; 
he was one of the pioneers of trades unionism, presiding at 
the first organized congress of labor unions as far back as 
1834. He was a man in whom the practical and the ideal 
were strangely blended. Essentially a Utopian, he was 
nevertheless a shrewd man of business. It is said of him 
that when on one occasion he submitted some scheme of 
social organization to the British government, and its con- 
sideration was postponed to the next session of parliament, 
he cried out to his friend Lord Brougham, "What! will you 
postpone the happiness of the whole human race to the next 
session of parliament?" 

Cabet: Etienne Cabet, a French physician, was the leader 
and inspirer of the last of the great Utopian movements. 
He was at first an active politician, his activities leading 
to his exile for five years. These five years were spent in 
England, where Cabet came under the influence of Owen. 
Returning to France in 1839 he published his famous Utopian 
romance, Voyage en Icarie. The plot of the book is essen- 



198 ELEMENTS OF SOCIALISM 

tially similar to that of More's Utopia — it is the journal of 
one who has travelled among a strange and unknown people. 
Cabet's system is very much that of Owen. He advocates 
communism, and outlines a plan for the inauguration of the 
new regime. This plan, or program, includes progressive 
income taxes, abolition of the right of inheritance, establish- 
ment of agricultural colonies and national workshops, and, 
above all, completely free education. The book created a 
tremendous furore in France, and in 1847 Cabet believed 
that he had four hundred thousand workers ready to go to 
America to found his ideal commonwealth. Actually, how- 
ever, the number of those who went was extremely small. 
Dissensions arose and split the movement, Cabet himself 
being expelled in 1856. He had grown dictatorial and nar- 
row and intolerant and his expulsion was the natural expres- 
sion of the revolt of the younger element. The movement 
never recovered from the split, and, like so many other 
Utopian movements, gradually degenerated and disappeared 
without leaving any material impress upon the life of that 
world which it was designed to transform and regenerate. 
The modern Utopians : The Utopian literature of the last 
half century has been thrown into the background by the 
stronger appeal of the Marxian thought and movement, 
but in literary quality and wealth of imagination much of it 
is of a very high order. Edward Bellamy, in Looking Back- 
ward, describes a great machine-made state in which every- 
thing is run with the precision of clock-work. It is the most 
mechanical of all the Utopias, and leaves very little room for 
the development of individuality. Nevertheless, its appear- 
ance, in 1887, gave a great impetus to the Socialist "move- 
ment" of the time, by suggesting plausible solutions to 
many practical problems which perplexed a great many 
persons. It contributed in no small degree to separate the 
Socialists and the Anarchists of the period more definitely 
than had been done heretofore. This was a natural result of 
Bellamy's emphasis of the State. On the other hand, the 
book probably contributed in some degree to the creation 
of the fear that Socialism must involve bureaucracy. Five 
years after Bellamy's book appeared William Morris pub- 
lished his News from Nowhere. In literary quality this is 
by far the best of all the modern works of its kind, and as 



THE UTOPIAN SOCIALIST IDEAL 199 

an example of English prose it ranks high. Morris's soul 
revolted against Bellamy's mechanical and unlovely common- 
wealth, and News from Nowhere was a counterblast, as it 
were. In his desire for freedom of the individual Morris 
swings to the other extreme from Bellamy and pictures a 
State which might be described as anarchist-communism 
with an idealized pastoral and handicraft system as its basis. 
William Dean How r ells in A Traveller from Altruria contrasts 
the present with the ideal and takes a position midway 
between that of the practical Bellamy and Morris the idealist 
and poet. H. G. Wells, on the other hand, views the world's 
problems as an engineer and suggests rather than describes 
their solutions. 

Value of the Utopian ideal: Despite all their eccentricities 
and failings the Utopian Socialists have greatly benefited 
mankind. They have rendered a great service by their 
criticisms of existing society, and by holding out the inspira- 
tion of a definite ideal. It has always been too common for 
men to accept things without questioning them, to assume 
that whatever is is right, and that what is must continue 
to be. The Utopians have bravely challenged this conserva- 
tism and forced millions of men and women to move in the 
direction of progress, who otherwise would not have moved 
at all. It matters little that their plans were impracticable, 
nor even that any serious attempt to carry them out would 
have brought about a worse condition than that which 
their authors sought to remedy. The inertia of conservatism 
and the inexorable forces of social evolution made the accept- 
ance of their plans impossible, but nothing could prevent 
mankind from seeing the evils which these prophets of a bet- 
ter social order decried, and so, even though we speak of the 
"failures" of dreamers like More and Owen, it must be con- 
fessed that much of the progress we have made has been 
directly inspired by them. Their success lay in other direc- 
tions than they dreamed. 



200 ELEMENTS OF SOCIALISM 



SUMMARY 

1. In every age men have pictured an ideal world to be attained by 
moral regeneration or by the adoption of a specific plan. 

2. These Utopias have had their bases in the economic conditions 
of the time in which they were written and usually picture the ideal 
by contrast with the real. 

3. The most influential of the Utopians of modern times were St. 
Simon, Owen, Fourier, and Cabet, who served as the fore-runners of 
the modern Socialist movement. 

4. The Utopian ideals have rendered great social service by their 
criticisms of existing society, and by shaking the inertia of conservatism 
and stimulating progress. 



QUESTIONS 

1. Upon what does the influence of a Utopia in bringing about social 
changes depend? 

2. Discuss the Utopian ideal of Plato. 

3. What were the social conditions giving rise to the Utopia of Sir 
Thomas More? 

4. Characterize briefly The City of the Sun. The New Atlantis. 
The Oceana. 

5. What elements of modern Socialism are to be found in the teach- 
ings of St. Simon? 

6. What is the significance of Fourierism to Socialist thought? 

7. What is the position of Owen in Socialist history? 

8. Characterize the work of the modern Utopians. 

9. What essential features are common to the ideals of all the 
Utopians? 

10. What positive results have the Utopians accomplished? 



Literature 

In addition to the works of the Utopian writers themselves, as men- 
tioned in the text, the following books will be found useful. 
Engels, F., Socialism, Utopian and Scientific. 
Guthrie, W. B., Socialism before the French Revolution. 
Hillquit, M., History of Socialism in the United States. 
Kaufman, M., Utopias, or Schemes of Social Improvement. 
Morley, H., Ideal Commonwealths. 
Podmore, F., Life of Robert Owen. 
Wolsey, T., Communism and Socialism. 



CHAPTER XVII 

THE IDEALS OF MODERN SOCIALISM 

Socialist ideals, old and new: While he may not dream 
with the Utopian Socialist of a perfected humanity, the 
Marxian Socialist has many ideals in common with the 
Utopian Socialist. The main difference between the two 
types lies in the bases of their hopes for the attainment of 
their ideals, rather than in the nature of the ideals themselves. 
For example, the Marxian Socialist is as conscious of the 
wastefulness and anarchy of the modern system of produc- 
tion as Fourier himself could possibly have been, and just 
as anxious to have a well-ordered productive system with 
all its waste and disorder eliminated. Moreover, he is quite 
as confident as Fourier ever could have been in his most 
sanguine moments that sooner or later the system of pro- 
duction will be so transformed. But he does not rest his 
hope for the attainment of that ideal of a well-ordered plan 
of production upon the merits of any scheme or plan, nor 
yet upon the ability of himself or others to persuade the 
world to improve its industrial methods. He simply rests 
upon the facts of evolution and their logic. If order is to 
be established in production it will not be because men have 
been persuaded that waste is against the moral law, but 
because that force which lies back of all progress, which is 
forever reducing the pain cost of life, impels the change. 
In a word, because they have discovered a better way. 

Socialism essentially idealistic: Every Socialist is of 
necessity an idealist. He could not be a Socialist in any real 
sense of the word unless he had first measured the existing 
reality by some standard. That standard is his ideal. He 
measures the world as it is by some conception of what it 
might be, and that conception translates itself into what it 
ought to be. It is sometimes said that the Marxian theory 
robs Socialism of its idealism and makes it harsh and mechan- 

201 



202 ELEMENTS OF SOCIALISM 

ical; that it takes the splendid moral passion of the move- 
ment and binds it down. Such criticism comes alone from 
those who do not know the Socialist movement. No one 
who is at all familiar with the history of the movement 
will contend that it has manifested less idealism since Marx 
than before him. The life of Marx himself is a splendid 
example of the loftiest idealism, and the upbuilding of the 
movement in the various countries has involved an amount 
of sacrifice on the part of its devotees which nothing but a 
great ideal could have inspired. No other movement in 
history, with the exception of early Christianity, has called 
forth so much heroic sacrifice, and service during so great a 
period and in face of such great odds. 

The ideal of international solidarity: Modern Socialism is 
essentially international. Its great birth-cry, the Communist 
Manifesto, called upon the workingmen of all countries to 
unite, and from that day to the present the ideal of inter- 
national working-class solidarity has been before the move- 
ment. The vision of a great world unity is older than Marxian 
Socialism, older even than the Christian religion. The ideal 
of internationalism is, therefore, not peculiar to modern 
Socialism. But that is equally true of all its ideals of per- 
sonal freedom, of peace, of fraternity. All the great and noble 
aspirations which the prophets of all the ages have voiced 
find expression in the Socialist movement. What is peculiar 
to the movement is the basis it offers for faith and hope of 
their realization. 

Unlike the Utopian Socialists of an earlier generation, the 
Socialists of to-day do not concern themselves with schemes 
for the formal federation of the world into a great world- 
republic. They waste no time devising schemes of federation 
similar to that of Fourier's hierarchy. What is far more 
important than any formal unity is the unity of spirit which 
the movement breathes in all its propaganda throughout the 
civilized world. International congresses of workers may or 
may not be progenitors of international parliaments of the 
Socialist nations of the world. One thing is certain, namely, 
that the Socialist movement, by holding out the ideal of 
international solidarity, is hastening the realization of a 
lasting world peace. 

Socialism is not anti-patriotic: But while the ideal of 



THE IDEALS OF MODERN SOCIALISM 203 

internationalism is fundamental to Socialism, we must not 
make the mistake of assuming that Socialism involves anti- 
patriotism, that there is anything incongruous in a Socialist 
being a loyal citizen of the country or state in which he lives, 
and of being ready to defend it against attack, if necessary. 
The Bebel who in the Reichstag opposed Bismarck and pro- 
tested against the annexation of Alsace-Lorraine as an outrage 
was quite logical when, on another occasion, in his debate 
with Domela Nieuwenhuis, the Dutch Anarchist leader, he 
declared that in case of an attack upon Germany by Russia, 
for example, the Social Democracy would rally all its forces 
to the defense of the Fatherland. Because they are inter- 
nationalists in their ideals it does not follow that Socialists 
must be anfo'-nationalists. A normal and sane patriotism, 
a love of country which does not rest upon hatred or envy 
of some other country, is no more opposed to the wider ideal 
of internationalism than is the love of one human being for 
another. 

Socialism and universal peace : The vision of world-peace 
which the Hebrew prophet proclaimed when he foretold the 
coming of a time when the social consciousness of the world 
must destroy war and forge its weapons into tools of peaceful 
industry finds its expression in the Socialist propaganda of 
to-day. Professor Theodor Mommsen, the eminent historian, 
said of the Social Democracy that it was the greatest peace 
organization in the German Empire. Similar observations 
have been made from time to time concerning the role of the 
Socialist movement of the world in the great war against 
war. The Socialist parties of all the world are pledged to 
resist the encroachments of militarism and to foster the 
development of friendly relations among all the nations of 
the earth. This is not due merely to a moral conviction that 
war is wrong and that peace is right and desirable. 

The reason for this attitude toward war, the reason why 
the ideal of universal peace plays such a large part in the 
Socialist propaganda, is not far to seek. In the last analysis, 
the heavy burdens of war fall upon the working class. Not 
only has the working class suffered most from wars in the 
past by furnishing most of the victims, but it is most injured 
by the heavy burden of present day militarism. To divert 
this wasteful expenditure, which is growing larger every year, 



204 ELEMENTS OF SOCIALISM 

from the channels of waste into channels of fruitful social 
expenditure is one of the tasks which the Socialist movement 
is everywhere demanding the parliaments of the world to 
undertake. What this would mean in the way of releasing 
vast resources for the work of building up instead of destroy- 
ing cannot be computed. In the United States during the 
thirty-year period, 1879-1909, we spent no less than 71.6 
per cent of our total national income 1 upon wars past and 
present and to prepare for future wars. With that sum set 
free what might we not do in the way of social reform? 

The basis for world peace : War will be banished from the 
earth, but not as a result of the inspiration of the minds and 
hearts of men by some poet's noble plea for peace, nor 
because some great artist like Verestchagin paints war with 
so much terrible reality that men and women will rise up 
and declare that the time has come at last to beat the swords 
into plow-shares. It will be banished because it becomes 
unprofitable. With rare exceptions, wars have always been 
carried on in the interests of ruling and exploiting classes. 
The hope for world peace is inseparably interwoven with the 
hope of the world's proletariat. So long as there is class 
ownership of the means of production and class government, 
so long must the workers in one land pile up surplus products 
which the master class will seek to force upon the market 
somewhere and somehow, even if it requires war to do it. 
But once the production of wealth is made a collective 
responsibility the workers will cease to pile up a surplus 
product; they will no longer be compelled to invade other 
lands to dispose of their surplus or be crushed beneath it, 
victims of the plethora of their own production. 

The foundations for world peace are being prepared by 
capitalism itself, just as the foundations of Socialism are 
being prepared by it. For its own ends it has broken down 
many of the divisions which kept the people of the different 
nations from understanding each other, and subjected the 
workers of many lands to one common form of exploitation. 
Its methods, resources, inventions, and, especially, its means 
of communication, have done much to lay the foundations of 
the world peace foresung by so many of humanity's choicest 

1 From a statement by Mr. Hamilton Holt, in the New York Times, 
September3, 1911. 



THE IDEALS OF MODERN SOCIALISM 205 

spirits. The nations have been brought closer together, 
education has become to a large extent the property of the 
masses, at least in its elementary forms. The workers have 
thus a key with which they can unlock the World's Treasuries 
of art, science, philosophy, literature, and no power can take 
from them the power which, sooner or later, they will exercise 
to erect the temple of universal peace. 

Immanuel Kant, the great German philosopher, published 
an essay in 1795 in which he made the remarkable declara- 
tion that universal peace could never be realized until the 
world should be politically organized, and that the world 
would never be politically organized until a majority of the 
nations had a representative form of government. That 
condition has now been fulfilled. Perhaps we are nearer 
than we think to the age when war among nations will be 
only a hideous memory. Be that how it may, the ideal of 
world peace which inspires the modern Socialist is not a 
hope that is woven of the stuff of which dreams are made. 
It rests upon the basis of solid reality. Social evolution has 
made the realization of the ancient dream possible. More- 
over, it has developed the class whose interest it is to make 
war against war. "The alliance of the working classes of all 
countries will ultimately kill war," declared the General 
Council of the International Workingmen's Association in an 
address written by Marx. The bringing together of millions 
of men and women of all lands into the international Socialist 
movement is one of the greatest triumphs of peace. 

Social peace within nations: The Socialist ideal of peace 
involves more than the abolition of war between nations. It 
is more fundamental, more inclusive, than that and involves 
the abolition of social war within nations. Here, too, the 
scientific Socialist shares a great deal with his Utopian fore- 
runners. The word "Commonwealth" which we apply to 
the State, meaning common weal or well-being, is in itself 
an admirable epitome of a great ideal. "This is a place 
where well-being is common to all," we say when we apply 
the term commonwealth to a State. We imply that there 
none is poor or other than well; that the interests of each 
individual are bound up with the interests of all other 
individuals and identical with them. "One thing ought to 
be aimed at by all men," says Cicero, "that the interest of 



206 ELEMENTS OF SOCIALISM 

each individually, and of all collectively, should be the 
same." But no modern State is a commonwealth in this 
sense. Between the "haves" and the "have-nots", the 
payers and the receivers of wages, the makers and the takers 
of wealth, there is war and bitter strife. 

The modern Socialist cherishes the ideal which the word 
"commonwealth" properly signifies. He believes that the 
noble standard set by Cicero will be attained once the 
economic conditions are prepared for it. But while the Marx- 
ian Socialist thus shares the hope and ideal of the Utopian 
Socialists of all past generations, he differs from them as 
much as the greatest astronomer of the twentieth century 
differs from the poorest and humblest astrologer of the 
ancient world. For all the Utopians based their faith in the 
realization of their ideals upon some genius, some scheme 
devised or principle discovered. The scientific Socialist, 
on the other hand, knows that no society ever came thus 
into being. He knows that the present is the child of the 
past and must be the parent of the future. If we would 
catch even a glimpse of the future we must study the develop- 
ment from past to present. Lammenais [says somewhere, 
"If we separate it from the past the present is silent as to 
the future." Studying the evolution of society the Social- 
ist of to-day finds a new basis in realism for his idealism. 
That which first divided mankind into classes was property 
and ever since property has continued to be the dividing 
force. But it is never simple property, the possession of 
goods, which creates class divisions. The basis of feudal 
class divisions was not the ownership of stores of things, but 
of the land from which things must be produced. The 
class basis of our present industrial society is not the posses- 
sion of goods and money by the master class, but the posses- 
sion of the means of production essential to the life of all 
society. The forces of evolution have created a class whose 
power is irresistible, namely the proletariat. The same forces 
of social evolution compel this class to accept the role of 
establishing the necessary conditions for the realization of 
the ideal of social peace and common weal. 

For if it be true that class ownership of the means of 
social life is the basis of class division and class rule, together 
with their evil results, then it must follow that with the 



THE IDEALS OF MODERN SOCIALISM 207 

destruction of class ownership the class ownersh p and rule 
must disappear. The task of the proletariat, therefore, is to 
abolish that which prevents the realization of the ideal of 
social harmony. Thus, the German Socialists in the Erfurt 
program declare that the transformation from capitalist 
ownership of the means of production to collect ve ownership 
"means the emancipation not only of the proletariat, but 
of the whole human race which suffers under the conditions 
of to-day. But it can only be the work of the working class, 
because the other classes, in spite of mutually conflicting 
interests, take their stand on the basis of private ownership 
of the means of production, and have as their common object 
the preservation of the principles of contemporary society." 

It may be said that the Socialist movement of to-day is 
vibrant with a passionate faith in the ages-old ideal of a state 
n which men "dwell together in unity," as the Bible has it, 
being made realizable and attainable through the working 
masses acting in response to the most pr mal of all laws, 
the law of self-preservation. It may sometimes happen that 
in the bitterness of the class conflict the ideal is forgotten, 
that some of those who fight against the rulers of to-day 
harbor in their hearts the hope of themselves becoming 
rulers and oppressors to-morrow. But if the means of pro- 
duction and exchange are made social property — and that 
is an essential condition of Socialism — the possibility of class 
rule will have been destroyed. Thus the organized Socialist 
movement represents not merely the massing of the forces 
which can and must destroy war between nations, but also 
the massing of power which will ultimately put an end to 
social war within the nations. 

Equality of opportunity : But social peace is not the whole 
of social well-being. It is at best only one of its fundamental 
conditions. The advantages and opportunities which have 
been developed through the long centuries of evolution must 
be socialized and made free to all. This is not the ideal of 
equality which is fundamental to most of the great Utopias. 
The modern Socialist does not look for equality and does 
not desire it. Nature's law is inequality — and the law is 
universal and immutable. As in the physical world the 
mountain contrasts with the plain and the valley, so there 
must always be inequalities of human capacity, character and 



208 ELEMENTS OF SOCIALISM 

attainment. The ideal of the modern Socialist involves 
equality of opportunity only, and that to the end of a 
glorious inequality, rather than the comfortable equality of 
the Utopians. 

Accustomed as we are to accept the idea of all men being 
born "free and equal/ ' the claim for equal opportunities for 
all seems moderate and reasonable and far from revolution- 
ary. In point of fact, however, no more revolutionary claim 
could be advanced. A serious attempt to realize it would of 
necessity involve a complete transformation of nearly every 
social relation. It is impossible to conceive of a system 
affording an equal chance to every child born into the world 
which does not begin with the right of every child to be 
well born. But that in turn involves the right of every mother 
to all the care and protection which human power can give, 
all that science and social organization can do to shield her 
from danger during the whole period from conception to 
childbirth. Nay, more, it includes the equal right of all 
men to healthy surroundings and conditions in order that 
they may develop the maximum of physical strength and fit- 
ness for parenthood available to them. The claim involves 
doing away with the contrast which presents itself in the 
cruel overwork of one set of mothers and the carefully pro- 
tected rest of another set of mothers. It involves doing 
away with the hideous contrast of the slum and the mansion. 
In a word, equality of opportunity cannot become a fact 
until we have solved the problem of overwork on the one 
hand and idleness on the other, the whole industrial problem, 
in fact. 

To say that the Socialist ideal is equality of opportunity 
for all does not mean that all must have identical opportu- 
nities, regardless of ability or inability to use them advanta- 
geously. It would be folly to waste social effort attempting 
to force a musical education upon a deaf mute, for example, 
or to give painting lessons to a color-blind child. What is 
meant is that every child should have an equal chance to 
develop whatever talent it may have. The cruel and anom- 
alous contrast of idle men and toiling children must disappear. 
No moral aspiration must be crushed by poverty in a state 
saturated with' wealth. 

Socialism does not seek to make men equal: There is 



THE IDEALS OF MODERN SOCIALISM 209 

probably a much greater degree of equality in natural human 
capacity and talent than has been generally recognized. 
The trend of modern scientific thought is to recognize that, 
within the species, inheritance counts for much less than 
environment. The moral frequently drawn from the famil- 
iar comparison of the descendants of the Juke family and 
the family of Jonathan Edwards is vitiated by the fact 
that the environment is not taken into account. Suppose 
the Juke children had been transplanted into the Edwards 
environment and the Edwards children into the Juke 
environment, would the results have been the same? It is 
not necessary that we should attempt to answer that ques- 
tion, here and now. 

Recognition of the fact that a great deal of the intellectual 
and moral superiority which exists among men is due to 
specially favorable circumstances, rather than to the inherent 
superiority of the individuals, does not involve acceptance 
of the ancient ideal of equality. The modern Socialist ideal 
is not a great level plain of comfortable mediocrity. It 
would not level down, binding the stronger to the level 
attained by the weaker, but it would simply strike from the 
spirit of humanity all that binds it and holds it down. 
Instead of placing the conditions most favorable to the devel- 
opment of special genius at the disposal of one class only, it 
would make those conditions the common heritage of all. 

Socialism and the individual: Obviously, a society based 
upon equality of opportunity as we have described it would 
not crush individuality. On the contrary, no other basis for 
true individualism is possible. Not until each individual is 
born heir to all the resources of civilization, free to take 
whatever he can assimilate, will the full flowering of a worthy 
individualism be possible. In the past Socialists have too 
readily accepted the definitions of their critics and regarded 
Socialism and Individualism as opposing principles. But in 
truth Socialism and Individualism rightly considered are 
but different aspects of the one great ideal. Not until 
opportunities are assured to all will they be secured for any. 
Only that society which socializes all its opportunities for 
healthful living, for knowledge and beauty will ever be able 
to conserve all its intellectual and spiritual forces and prevent 
their waste. Only in such a society will Life and Art be united, 



210 ELEMENTS OF SOCIALISM 

so that all lives may be useful and beautiful. The mag- 
nificent achievements of the Athens of Sophocles and Prax- 
iteles were made possible only through the communism of 
opportunity which her vast system of public ownership 
afforded, enabling her to reach through her communism 
of opportunity the highest development of individualism 
the world has yet known. And in like manner we shall find 
that the highest individualism is possible only where the 
means of the common life are not controlled by individuals 
or classes, but by the whole body politic. 

Basis of the Socialist ideal: The Socialist ideal rests, 
ultimately, upon that fundamental principle which Paul per- 
ceived, namely, that "we are all members one of another." 
We are social animals, as Aristotle wisely observed. We 
became human through being social, in all probability. 
While some suffer more severely than others from the evils 
which arise out of our social mal-adjustments, yet it is true 
that we all suffer. The richest among men cannot realize 
healthfulness, beauty, joy and inspiration in life in a world 
that is diseased, ugly, miserable and sordid to the last degree. 
The good of the individual is, happily, not separable from 
the good of all other individuals. Fortunately, the fever 
which starts in the hovel spreads also to the mansion. Like- 
wise the ugliness which stamps the lives of the poor stamps 
also the shoddy splendors of the rich. If there is one fact 
more plainly evidenced by human progress than any other, 
it is that individualism flourishes best where the opportu- 
nities for health, for knowledge, for beauty and for joy are 
most widely diffused. 

"Where there is no vision the people perish." The Social- 
ist movement of to-day is keeping alive in the hearts of men 
the vision of a world in which the highest good of each appears 
as the first fruit of the devotion of each to the common good; 
of a social order in which community of interests shall pass 
beyond the boundaries of family, of city and nation and 
unite all mankind in bonds of peace and fellowship. No 
virtue will be lost, even though old virtues may take new 
forms. Courage, for example, which we have so long asso- 
ciated with war, will find a more generous development in 
the services of peace. And the strength and daring which has 
developed our great economic forces, heedless of the ugliness 



THE IDEALS OF MODERN SOCIALISM 211 

and suffering they involved, will not remain idle and become 
atrophied. They will find their fullest and most joyful 
expression in the organization of those forces to make the 
world beautiful and glad and free. 



SUMMARY 

1. Socialism is essentially idealistic, but modern Socialism bases its 
ideal upon the logic of evolution, and not upon the merits of any scheme 
or plan. 

2. Socialism upholds the ideals of international solidarity, universal 
peace and human brotherhood. 

3. Socialism aims also at the ending of the class struggle and the es- 
tablishment of peace within nations. 

4. Socialism seeks to establish equality of opportunity, not equality 
of wealth or ability. 

5. It is only with equality of opportunity that true individualism 
can be developed. 

QUESTIONS 

1. How does the ideal of modern Socialism differ from the Utopian 
ideal? 

2. In what ways does the Socialist movement make for international 
peace? 

3. What is the basis for the Socialist hope for world peace? 

4. Is it true that "Socialists advocate the class struggle"? 

5. In what sense does equality form a part of the Socialist ideal? 

6. Why is it incorrect to regard Socialism and individualism as 
antithetical? 

Literature 

Angel, Norman, The Great Illusion. 

Kautsky, K., The Social Revolution, Part II. 

Morris, William, and Bax, E. B., Socialism, its Growth and Outcome. 
Chap. XXI. 

Spargo, John, The Spiritual Significance of Modern Socialism. The 
Substance of Socialism. 

The Fabian Essays. 



CHAPTER XVIII 

THE SOCIALIST STATE — POLITICAL 

No detailed prediction: Socialists are constantly con- 
fronted with a demand for a detailed description of the 
Socialist society of the future. This it is impossible to give, 
since all the forces which made for social change cannot be 
known. Any such prediction would necessarily be pure 
Utopian romance. Wilhelm Liebknecht, the great leader of 
the German Social Democracy, replying to such a request 
from an opponent in debate on one occasion said: 

"Never has our party told the workingmen about a 'state 
of the future/ never in any other way than as a mere Utopia. 
If anybody says, 'I picture to myself society after our 
program has been realized, after wage labor has been abol- 
ished and the exploitation of men has ceased, in such or such 
a manner/ well and good: ideas are free, and everybody 
may conceive the Socialist State as he pleases. Whoever 
believes in it may do so, whoever does not, need not. These 
pictures are but dreams, and Social Democracy has never 
understood them otherwise." 

It is possible, however, while adhering strictly to the 
scientific method and spirit, to set forth some of the condi- 
tions which must obtain in a Socialist society. We can 
interpret tendencies in the light of known economic laws, 
and determine very definitely some conditions which must 
exist under Socialism, and some conditions which are incom- 
patible with it. Social forms cannot be made to order; 
they are the product of the collective intelligence operating 
within the limits fixed by the economic environment. Changes 
in the social order must come, and they will be in the direc- 
tion of further progress. A knowledge of the past and a 
recognition of the laws of social evolution enable us to tell 
something of the future organization of society. In a like 
manner Morelly, in 1756, predicted the downfall of the 

212 



THE SOCIALIST STATE— POLITICAL 213 

Bourbon monarchy in France and the establishment of a 
state free from feudal privilege, but he could not by any 
possibility foresee the great material and cultural develop- 
ments of the nineteenth century in all their bewildering 
detail, and when he did attempt to picture the special forms 
of the future social state the result was fantastic. 

The next step in social evolution: The concentration of 
capital, the ever enlarging scale of production, the with- 
drawal of the actual owners from the management of indus- 
try, the education and organization of the working class, 
the raising of the standard of life making exploitation more 
difficult, the increasing democratization of the State and the 
enlargement of its economic functions, all indicate that the 
next stage in social evolution will be marked by the social- 
ization of the principal means of production and exchange. 
The present industrial and governmental systems are so 
shaping themselves as to make socialization possible, and 
the masses are rapidly reaching the point at which they will 
be able to end economic exploitation and when they will have 
the ability to administer an industrial democracy. 

Will the State "die out"? An unfortunate confusion of 
thought often arises over the attitude of Socialists toward the 
State. This is due to the fact that many Socialists have 
given to the term "State" a significance much narrower than 
that which it bears in current usage. Engels, for example, 
writes: "The first act by virtue of which the State really 
constitutes itself the representative of the whole of society — 
the taking possession of the means of production in the name 
of society — this is, at the same time, its last independent 
act as a State. State interference in social relations becomes, 
in one domain after another, superfluous, and then dies out 
of itself; the government of persons is replaced by the admin- 
istration of things, and by the conduct of the processes of 
production. The State is not 'abolished.' It dies out." On 
the same subject, Bebel says: "The State is the inevitably 
necessary organization of a social order that rests upon 
class rule. The moment class antagonisms fall through the 
abolition of private property, the State loses both the neces- 
sity and. the possibility for its existence." But further he 
says that "an administration is requisite that shall embrace 
all the fields of social activity. Our municipalities constitute 



214 ELEMENTS OF SOCIALISM 

an effective basis thereto. At the head of the local admin- 
istration stands the central administration — as will be noted, 
not a government to rule, but an executive college of admin- 
istrative functions." 1 Now, it is obvious from the qualifica- 
tions implied in these statements by Engels and Bebel that 
neither of them used the word "State" in the customary 
sense. An "administration of things" would be impossible 
except through some form of "government of persons." 

The political State and the industrial State : It may almost 
be said that within the geographical boundaries of modern 
nations there are two States rather than one. Probably in 
no previous age has there been as complete a separation 
between political and industrial organizations. The political 
State, the whole political organization of society, was eco- 
nomic in its origin. Under feudalism the hierarchy of land- 
owning lords directed both the State and the characteristic 
agricultural organization. Under the Town Economy the 
aldermen of the various guilds constituted the city govern- 
ment. But when the democratic movement of the eighteenth 
and the beginning of the nineteenth centuries destroyed 
autocracy in Western Europe and America, established con- 
stitutional governments and broadened the suffrage so as to 
enfranchise, in some countries, practically all males above 
the age of twenty-one years, the lords of the new capitalist 
industry did not oppose or directly control the political 
State, but preaching the doctrine of laissez faire, proceeded 
to organize that which for all practical purposes is a distinct 
industrial State within the political State, yet not of it. 
By the end of the nineteenth century the process was prac- 
tically completed. The empire of business, autocratic in 
form, controlled the lives of the people far more than the 
political State, and taxed them more heavily. By insidious 
means it succeeded in controlling government for its own 
ends, confining the functions of the political State largely 
to the protection of private property. Socialism sees as the 
logical outcome of this process the consolidation of the indus- 
trial State with the political State, retaining of the industrial 
State the organization and administration of industrial 

1 Engels, Socialism, Utopian and Scientific, p. 76 ; Bebel, Woman 
under Socialism (translated by Daniel De Leon), p. 272; Idem, p. 275- 



THE SOCIALIST STATE— POLITICAL 215 

affairs, and of the political State democracy and representa- 
tive government. 

Recent socialization of the State: This process of con- 
solidation has already begun. From the point of view of those 
who would maintain the autocracy of business, the extension 
of the suffrage and of popular education was fatal. The 
consciousness of the domination of society by business 
interests is reflected in the universal social unrest and the 
popularity of all attempts to weaken the organization of 
capital. The power of the industrial State to dominate 
the political State has passed its climax. The doctrine of 
laissez faire has lost its force and popularity, and the State 
instead of being looked upon as the oppressor, becomes the 
medium through which people are attempting to assert 
control over the industrial order. Partial victories have 
already been won. The State is extending its control far be- 
yond the limits set by the political philosophy of a generation 
ago. In the United States the Interstate Commerce Act 
of 1887 formed an entering wedge. The commission formed 
by that act, though never in any sense radical, has in many 
cases asserted its power in opposition to the interests of the 
railroads. The establishment of the Department of Com- 
merce and Labor with its bureaus of Corporations, Manu- 
factures, and Labor, was an important step in the direction 
of socialization. The significance of this department lies 
rather in its great possibilities of further extension than in 
the work of investigation and supervision which it is already 
able to do. 

In like manner the State is broadening its scope into other 
fields. Postal savings banks have been established against 
the opposition of the banking interests, and the establish- 
ment of a parcels post system in spite of the opposition of 
the express companies seems to be one of the certainties of the 
near future. The national and state agricultural experiment 
stations and their bulletins and other educational publica- 
tions have been of tremendous value to the farming popula- 
tion. The great irrigation and drainage projects, the build- 
ing of thousands of miles of roadways, the construction of 
the Panama Canal, the reservation and protection of forests, 
are all enterprises, essentially socialistic in nature, of untold 
social value, for the carrying out of which private enterprise 



216 ELEMENTS OF SOCIALISM 

is either too timid or demonstrably incapable. The State and 
local governments contribute to the socializing process 
through free education, the administration of institutions for 
the mentally and physically infirm, the organization of 
charities, the reservation and beautifying of parks, the con- 
struction of canals, the ownership and operation of water- 
works, gas and electric plants, docks and ferries, fire-fighting 
and street cleaning services. The interest of the State in the 
industrial order has been asserted by laws, however imper- 
fect, restricting child labor, providing for employers' lia- 
bility, limitation of the hours of labor for women, the in- 
stallation of safety devices, factory inspection, supervision 
of building construction, and so on. 

Necessary functions of the Socialist State: Any State 
must maintain order and suppress violence. It must have 
the power to define crime and apprehend and punish crim- 
inals, and to restrict the liberty of those persons who by 
their conduct would deny equal liberty to others. It must 
determine the manner in which the political activities of the 
individual shall be exercised. It must determine the rights 
and limitations of the ownership of property. It must 
enforce contracts and administer justice in civil affairs. It 
must have the power to collect taxes and use the proceeds 
of taxation in the public interest. And it must deal with 
foreign States in the adjustment of international relations 
and have the power to protect itself from external aggression. 

In addition to these general powers, the Socialist State 
must have the power to own and operate industries and 
transportation systems of all kinds, in so far as they can be 
so owned and operated to the public advantage. It must 
have the power to regulate private and cooperative industries 
and to protect the broader interests of all the people against 
the special interests of individuals and groups. It must 
guarantee a minimum compensation to labor and provide 
opportunities for its productive employment. It must have 
the power to make and enforce rules of sanitation. It must 
administer a comprehensive system of social insurance. It 
must provide full educational opportunities for all, both 
cultural and technical, and must provide opportunities for 
the advancement of knowledge through research and experi- 
mentation. 



THE SOCIALIST STATE— POLITICAL 217 

The Socialist State must be democratic : In order to carry 
on these functions in the interest of the whole people, the 
interests of all must be consulted. A Socialist State without 
democracy would be an impossibility. Moreover, the tend- 
ency of modern times toward democracy is too strong and 
fundamental to be seriously checked. The State which 
must assume supervision of industry is already to a large 
extent democratic in form in most industrial countries. The 
most important barrier to the realization of the substance of 
democracy as well as the form is the private ownership of 
capital. The destruction of capitalism must be the work 
of the whole people, and there is no reason to suppose that 
the ideals of democracy which have become so firmly en- 
trenched will be abandoned when their realization becomes 
possible. 

Tyranny is only the rule of the ignorant by the shrewd, 
and with universal education it becomes impossible. Where 
men can read they cannot be kept in ignorance of arbitrary 
misrule. Even now, the most stringent laws are ridiculously 
ineffective against the conscious opposition of a majority, 
or even of a strong minority. 

Meaning of democracy: Democracy does not mean that 
everything must be decided by popular vote, including the 
selection of every official. In a real democracy it must be 
possible for every voter to be well informed concerning the 
persons and measures to be voted upon. Democracy means 
simply a form of society in which the collective will can be 
effectively expressed in regard to any matter in which there 
is a conscious collective interest. 

Democracy necessarily involves the extension of the 
suffrage to all adults who are capable of forming a rational 
opinion on public questions. The extension of the suffrage 
during the nineteenth century has been one of the greatest 
social gains under the capitalist regime, and there is no 
question in the minds of Socialists as to the desirability of 
its further extension to include women as well as men. The 
line can only be logically and fairly drawn at some other 
point than that of sex, as, for example, to exclude minors, 
criminals, lunatics, idiots and aliens, regardless of sex. 

Coercion in the Socialist State: It is futile to talk of 
a Socialist State absolutely free from coercion. Freedom 



218 ELEMENTS OF SOCIALISM 

from coercion and restraint is an ideal which most Socialists 
hope may ultimately be realized, but any form of social 
organization must have the power to protect itself from 
anti-social forces. Even Peter Kropotkin, 1 in his non- 
coercive anarchist-communist society would expel those 
individuals who proved unwilling or unable to abide by the 
social will. But coercion in a democratic administrative 
State not dominated by class interests would be something 
very different from the coercion exercised by class-ruled 
states of the past and the present. Coercion would be re- 
sorted to only to enforce the carrying out of the social will. 
Taxes must be collected, conflicting interests may arise be- 
tween individuals and between groups and have to be de- 
cided. There must be the power of enforcing such decisions 
or they will be valueless. This does not mean tyranny or 
the arbitrary exercise of force. Even under a State so 
much dominated by class interests as the State of to-day is, 
the average citizen is rarely conscious of its coercive power. 
Only a small minority ever feels directly the "strong arm 
of the law." In point of fact the coercive power of custom 
and fashion is much more generally felt. The great majority 
of citizens recognize that laws are necessary for the smooth 
working of the social machinery, and if a number of citizens 
do not approve of the form or general character of a law 
they do not refuse to obey it, but proceed to agitate for its 
repeal or reform, as the case may be. When laws are made 
in the interest of the whole people, and not in the interest 
of a class, as now so often happens, conformity will be much 
easier and more general than now. It is not easy to see how 
any but the mentally diseased and the anti-social would-be 
exploiters of their fellows would ever feel the coercive power 
of the Socialist State. 

Socialism and individual liberty: A democratic society 
would not enact legislation which would restrict the liberty 
of its own members unduly. Men do not voluntarily forge 
chains to bind themselves. Freedom of movement and 
migration would not be restricted except where it endangered 
others, as in the case of a person suffering from a contagious 
or infectious disease. There would be freedom from arrest, 
except for infringing upon the rights of others, with com- 

1 Kropotkin, The Conquest of Bread. 



THE SOCIALIST STATE— POLITICAL 219 

pensation for improper arrest. Respect for the privacy of 
domicile and correspondence; liberty of dress, subject to 
decency; free speech and publication, subject to the pro- 
tection of others by the State against insult, injury or inter- 
ference with their recognized rights, and the responsibility 
of the individual to the State, are all rights which a Socialist 
State could not deny. The individual must be free in all 
that pertains to art, science, philosophy and religion, and 
their teaching, subject to well understood, though perhaps 
not easily definable rules. Liberty is not license. The 
Socialist State, while giving full freedom to the artist, would 
not be likely to tolerate obscenity in the name of art. Liberty 
in science does not mean that every amateur biologist must 
be permitted to experiment upon live animals, or upon 
criminals, without regulation, simply because he chooses to 
invoke the freedom of science. Religious liberty does not 
mean that the State would not interfere to prevent or punish 
crimes committed in the name of religion. Liberty of indi- 
vidual activity must always be limited by the equal rights 
and privileges of others. Any other principle would involve 
the assertion of one person's freedom and its protection at 
the expense of the freedom of some other person or persons. 

International relations: The establishment of a " World 
Economy" 1 must necessarily have the effect of softening the 
differences between nations and of bringing about something 
approaching a world federation. But differences in language, 
and in special economic and social problems, will probably 
act as barriers to the complete merging of nations. The 
development of arbitration, and the establishment of the 
Hague Tribunal, are indications of the way in which inter- 
national differences will be settled in the future. Since 
under Socialism there would no longer be any object in 
warring for foreign markets, the chief cause of present inter- 
national difficulties would disappear. There would be less 
need for a diplomatic and consular service than at present, 
but undoubtedly each of the great nations would maintain 
representatives at all the leading foreign capitals, alike as 
agents of direct communication between governments and to 
give service to travellers. 

Socialism and the administration of justice : Under Social- 

1 Seep.97. 



220 ELEMENTS OF SOCIALISM 

ism, as now, justice must be administered by the State. It 
must, however, be further socialized and made free. Court 
fees and attorneys' fees are undemocratic because they give 
the advantage to the wealthier litigant. The delays of the 
law and the unrestricted right of appeal on technicalities 
are used to wear out the poorer litigant. These inequalities 
must be abolished. Law itself would probably be simplified 
so that a layman could understand it, and a great deal of 
present law, rendered necessary by the capitalist organiza- 
tion of society, would become obsolete. The abolition of 
private capital and exploitation would destroy the motive 
for the greater part of the crime of capitalist society and the 
object of most civil litigation. The administration of justice 
in the Socialist State, therefore, would, to a very large extent, 
be confined to the equitable adjustment of the industrial 
relations of individuals and cooperative groups. 

Education in the Socialist State: Free public education 
from the kindergarten through the university is essential 
to equality of opportunity. It is equally true that equality 
of opportunity requires that a certain amount of education 
as a minimum shall be enforced by the State. The matter 
of education is socially too important to be left to the children 
themselves, or to their parents even. The State must assume 
the responsibility of developing the maximum of efficiency 
in its future citizens. The Socialist State would be able to 
provide the fullest opportunity for vocational training, so 
that the natural aptitude of the individual could be consid- 
ered and taken advantage of. For example, the boy with a 
natural aptitude for mechanics could be given, in addition 
to the required cultural instruction, special vocational train- 
ing, a regular apprenticeship in fact, in the collective work- 
shop or factory. The boy with a natural aptitude for chem- 
istry could be given the special facilities best adapted to 
develop that aptitude and insure his maximum of efficiency 
as a producer. Not only would the State make education 
free in the sense of providing tuition and books without fees: 
it would go further and provide that without which these 
are of no avail — security of maintenance during the period 
of education. Establishing its own standards for entrance 
into various careers the State would be able to provide 
against too many entries for certain occupations and too few 



THE SOCIALIST STATE— POLITICAL 221 

for others. In principle such a system already exists in 
embryo in the scholarships offered by our great universities 
and colleges. What is needed is a system of education which 
will give to every child opportunity to develop its special 
gifts, and so provide the State with the largest number of 
contented and efficient workers. 

Altered functions of the State under Socialism: Under 
capitalism the chief functions of the State are directed to 
one end, the maintenance and protection of private property. 
Under Socialism, while private property would not be abol- 
ished, it would be of less importance than now. The chief 
functions of the State would then be (1) the maintenance 
of the greatest amount of individual liberty compatible with 
the equal liberty of all— in other words, the protection of 
individuals and groups of individuals from exploitation, and 
(2) the administration and regulation of socialized wealth. 
The democratic State is simply a conveniently defined 
organization of society acting in a collective capacity for the 
highest welfare of its members. 

The transitional State: No new order can spring full 
grown and perfect from sudden revolution. Even the analogy 
of the "mutation" theory does not justify such a belief. 
The transition is already in progress. Every move in the 
direction of the socialization of the State, while not in itself 
necessarily socialistic, is a part of the adjustment of transi- 
tion. Long before any nation consciously and voluntarily 
adopts the Socialist ideal, it will have already tried many 
of its features. The Industrial Revolution was a century in 
progress, and no other social transformation so fundamental 
and far-reaching was ever before accomplished in twice that 
length of time. Social evolution has always been a con- 
stantly accelerating process, and it seems probable that the 
social revolution now in progress will reach its culmination, 
Socialism, in a shorter length of time than any of the great 
social changes of the past. This is probable because of the 
better historical perspective in the minds of those whose 
interest it is to hasten the revolution, and the more widely 
diffused consciousness of impending change and understand- 
ing of its nature. But the various elements of the Socialist 
ideal will not be realized at once, as a result of a single 
stroke, a sudden change. There must of necessity be a 



222 ELEMENTS OF SOCIALISM 

period of transition during which we more or less con- 
sciously shape the State to our ideal. 

The Socialist State not static: Even after the Socialist 
ideal has been to all intents and purposes attained, there will 
still be an infinity of progress ahead of it. The evolutionary 
point of view has put an end to the ideas of finality and 
perfection. The social ideal always recedes with its pro- 
gressive realization, and every step forward opens new vistas 
of possibility of which the most far-seeing had not dreamed. 
Socialism is only one more step in the eternal process of 
evolution. As in every previous forward step, some undesir- 
able features of the old order will probably be carried into the 
new, some unlooked-for evils may appear and form the basis 
for an argument in favor of the impossible return to the 
"good old days." It may even be that some desirable 
features of the present order will be lost. But the result 
will be good upon the whole and make for larger, happier, 
fuller lives. Progress will continue. Problems will be solved 
and new problems take their place in the minds and hearts 
of men. The ideal we now look forward to and name Social- 
ism may in its turn be replaced by another social order, a 
stage of evolution of which we can have no perception to-day, 
any more than the pastoral Israelites could have had of the 
modern age of capitalism, 



THE SOCIALIST STATE— POLITICAL 223 



SUMMARY 

1. Modern Socialists do not attempt to give a detailed description 
of the Socialist State, but they do point out certain conditions which 
must logically result from continued progress. 

2. The modern state which has been largely separated from the in- 
dustrial process is now gradually expanding and assuming a greater 
variety of economic functions. 

3. The Socialist State will be the result of a continuation of this 
process and of the achievement of full political and industrial democracy. 

4. The Socialist State will not be static, and the possibilities of prog- 
ress are infinite. 



QUESTIONS 

1. Why must modern Socialists refuse to make predictions in regard 
to the details of the Socialist State? 

2. What did Engels mean by the " dying out" of the State? 

3. What significance do Socialists see in the extension of public 
ownership? 

4. Why is democracy essential to Socialism? 

5. What are the necessary Hmitations upon individual liberty? 

6. What changes in the manner of administering justice would be 
necessary under Socialism. 

7. Why is free public education necessary to Socialism ? 

8. Explain what Socialists mean by the Social Revolution. 

9. How do modern Socialists differ from the Utopians in respect to 
the finality of their ideals? 



Literature 

Bebel, A., Woman Under Socialism. 
Engels, F., Socialism, Utopian and Scientific. 
Hillquit, M., Socialism in Theory and Practice , Part I, Chap. V. 
Spargo, John, Socialism, a Summary and Interpretation of Socialist 
Principles, Chap. IX. 
Wilson, Woodrow, The State, Chap. XV and XVI. 



CHAPTER XIX 

THE SOCIALIST STATE — ECONOMIC 

Introductory: Socialism is sometimes objectively defined 
as "the social ownership and control of all the means of 
production and exchange." According to this definition, 
there could be no possibility of any form of private property 
except in goods used in direct consumption, and even the 
apportionment of these must be controlled by some social 
authority — presumptively the State — in which the owner- 
ship of the means of production, distribution and exchange is 
vested. 

To state this proposition clearly is to reveal its absurdity. 
Every simple tool would have to be made collective property. 
It is perfectly evident that the millions of Socialists throughout 
the world are not trying to bring about public ownership 
of hand-saws, spades, market-baskets and wheel-barrows, all 
of which are means of production or exchange. Even if such 
a thing were otherwise conceivable, it would involve such a 
bureaucratic form of government as not even the most 
fanciful of the writers of anti-Socialist fiction have devised. 
There must be something wrong with our definition, then. 
Of this we may be assured, in the first place because no con- 
siderable number of rational beings could seriously desire 
the government to own and control all things which under 
any circumstances could be used as means of production or 
exchange, even if it were possible to draw a hard and fast 
line between consumption goods and production goods. In 
the second place, it would be impossible to rouse the citizens 
of any State or city to rebel against the private ownership 
of hand-saws or market-baskets in sufficient numbers to bring 
about their ownership by the collective authority, the State 
or the city. 

The essential principles of Socialism: If we turn back to 
Chapter I, and compare the definition there given with the 

224 



THE SOCIALIST STATE— ECONOMIC 225 

one we are now discussing, the difference between the two 
will at once appear. That difference is fundamental. In- 
stead of defining Socialism as involving the social ownership 
of all the means of production and exchange, the definition 
with which we began our study defines it as involving "the 
collective ownership and control of the principal means of 
production and exchange, in order that poverty, class 
antagonisms, vice, and other ill results of the existing social 
system may be abolished, and that a new and better social 
system may be attained." 1 

This definition places the matter in a wholly new light. 
Instead of owning and controlling every means of production 
and exchange, down to spades and wheel-barrows, jack-knives 
and baskets, we are to picture a State which owns and con- 
trols only the principal means of production and exchange, 
and leaves all other means in private hands. And the 
definition considered as a whole makes it perfectly clear 
that the means of production and exchange to be socialized 
and made subject to social ownership and control are those 
which in present society are used by individuals or a class, 
and used by their owners to exploit the actual producers of 
wealth. Objectively considered, therefore, Socialism consists 
of (1) a method — the social ownership and control of those 
means of production and exchange which are now used to 
exploit the producers of wealth; and (2) a result — the 
abolition of various evils resulting from the present form of 
ownership, such as poverty, vice and class antagonism, and 
the improvement of society as a necessary consequence. 

Authenticity of this definition: Which of these definitions 
is authentic, it may be asked. Are we to accept that which 
declares that the social ownership and control of all means 
of production and exchange is aimed at, or that which limits 
social ownership and control to the principal means of pro- 
duction and exchange? For answer we must turn to the 
recognized leaders of the movement, and to its authorized 
statements. It is true that in the popular literature of 
Socialism the former definition is sometimes used, but it is 
almost invariably explained that the social ownership of such 
essentially individualistic means of production and exchange 
as those we have mentioned above is not contemplated, but 
1 See p. 5 



226 ELEMENTS OF SOCIALISM 

only those social means of production and exchange which 
are owned by a class of non-producers and by them used to 
exploit the producing class. In other words, the context 
almost invariably shows that the first definition is used to 
convey the meaning which the second definition more accu- 
rately expresses. In like manner, such phrases as "the 
abolition of private property" are frequently encountered 
in the propaganda literature of Socialism, though less fre- 
quently than formerly. But here, again, the context almost 
invariably points out that only the abolition of certain forms 
of property is meant, not the abolition of private property 
in general. However we may criticise these popular presenta- 
tions of Socialism for their failure to state the principles of 
the movement with precision and accuracy, we cannot with 
any degree of intellectual integrity ignore the meaning which 
the context makes obvious and assail the defective formula 
merely. That is pettifogging. Nor are we justified in 
selecting always the weakest statement of the case for Social- 
ism, the most vulnerable. Socialism, like every other great 
principle or movement, can only be fairly and adequately 
judged by the strongest presentation of its case that can be 
made. 

View of Marx and Engels : That we are right in saying that 
Socialism does not aim at the abolition of private property 
in all forms could be easily proven by citations from prac- 
tically every Socialist writer of recognized authority, both 
in Europe and the United States, and from many Socialist 
programs, manifestos, and other official declarations. For 
our present purpose it will be sufficient to quote from that 
classic statement of the Socialist position which has been 
the inspiration of almost every Socialist writer of consequence, 
the Communist Manifesto. Marx and Engels take up the 
charge that the movement aims at the abolition of private 
property and reply to it. In quoting from their reply we 
change the word "Communism" to its latter day equivalent, 
"Socialism," to avoid confusion: 1 

"You are horrified at our intending to do away with 
private property. But in your existing society private prop- 
erty is already done away with for nine-tenths of the popula- 
tion ; its existence for the few is solely clue to its non-existence 

1 The reason for this change will appear from the discussion on p. 259. 



THE SOCIALIST STATE— ECONOMIC 227 

in the hands of those nine-tenths. You reproach us, therefore, 
with intending to do away with a form of property, the 
necessary condition for whose existence is the non-existence 
of any property for the immense majority of society. 

"Socialism deprives no man of the power to appropriate 
the products of society: all that it does is to deprive him 
of the power to subjugate the labor of others by means of 
such appropriation." 

Central motive of Socialism: From the foregoing it will 
be readily seen that the essential feature of Socialism is 
not a form of industrial ownership and management, but 
an adjustment of social relations. The central idea of Social- 
ism is the class struggle, not public ownership. The principal 
aim of the movement, that which gives it force, is the deter- 
mination to do away with the power of a class of non-pro- 
ducers to exploit the producers. To accomplish that end 
it is proposed to take out of the hands of the exploiting class 
the power of the State, and that property which makes it 
possible for the owners to exploit the labor and needs of 
all the rest of society. Public ownership is, therefore, only 
to be regarded as a means to an end, not the end itself. 
A secondary motive of the movement is the more efficient 
organization and administration of industry, so that there 
may be less waste and larger social returns. 

The place of private industry: Let us suppose the case of 
a man owning a small farm which he cultivates himself, 
and from which he manages to obtain a living for himself 
and family. We may consider it in two aspects, as property, 
and as an agency of production. As property the farm is, 
even under the present system, subject, like every other 
form of property, to the ultimate ownership of the State. 
Under Socialism this principle would of necessity be retained 
in the organic law of the State. The actual title to the land 
would be vested in the State, but the individual would have 
a full use-right, granted by the State and protected by it. 

Considering the farm as an agency of production, we are 
at once confronted with the question, what possible reason 
could the Socialist State have for denying the right of that 
farmer to operate the little farm in his own way and to his 
own advantage? So long as he did not exploit the labor and 
needs of others the State would not be likely to interfere 



228 ELEMENTS OF, SOCIALISM 

with him. For the Socialist State is not a class power, 
distinct from the people as a whole, and reflecting class inter- 
ests. It is the people, and reflects their interests. It is not 
possible to conceive the citizens of any community generally 
deciding to take such a farm out of the hands of the indi- 
vidual and bringing it under the management of the com- 
munity in the absence of any sense of exploitation, except 
for one reason, namely, an acutely felt need of a superior 
management of the farm. It is conceivable at least that con- 
ditions might arise in which, agriculture having failed to 
such a degree that famine confronted the nation, it would be 
necessary for the State to assume full charge of all agricul- 
tural operations, to store the product and dole it out in 
carefully measured rations. This is not all likely to happen, 
of course. The illustration serves to make clear that in any 
society, under certain conditions, the collective need might 
involve the suppression of private enterprise. But as a 
general rule, it is safe to say that social ownership and con- 
trol will be substituted for private ownership and control 
because the latter results in the exploitation of the producing 
class by a non-producing class. 

Individual competition with the State : It may be argued 
that our illustration is somewhat inconclusive. That agri- 
culture seems peculiarly fitted to individual production, and 
that the real test of the principle we are discussing must be 
its application to some form of industry that is essentially 
collective in its methods. Such an industry is shoemaking, 
for example. Let us suppose, then, that the shoemaking 
industry has been socialized and is now carried on in State 
owned factories. The citizens as a whole are satisfied with 
the results. The shoes are good; the workers are well paid; 
the consumers of shoes get better value than would be pos- 
sible under capitalist production. But A, who is a shoe- 
maker, is a man of marked individuality. He hates his 
employment in the State factory, where he is only a maker 
of parts of shoes. He wants to make shoes by hand in the 
old-fashioned way, to put into each pair of shoes something 
of his own individuality. So long as he can find no one who 
wants shoes made in that way, no one who is dissatisfied 
with the factory product, he will be a dissatisfied man, his 
individuality will be repressed, not by the State, as such, 



THE SOCIALIST STATE— ECONOMIC 229 

but by the general indifference of society to his point of 
view. In this respect he will be no worse off than are all 
such workers in present society. But suppose that B, who 
wears shoes but does not make them, dislikes the factory 
product, and desires above all else to wear .things made 
specially for him, things which express the individuality of 
the makers and of himself. If under such circumstances A 
and B can agree upon terms, there is no reason why A should 
not make shoes for B. There is no exploitation. Such com- 
petition with the State on the part of private producers 
might well be encouraged rather than discouraged. If the 
private production made headway faster than the State 
production, despite the enormous advantages enjoyed by the 
State, it would mean that its efficiency was greater. In that 
case, the State factory would have to improve its methods 
or fail and be supplanted by the more successful private 
production. 

Voluntary cooperation : This principle is not vitiated by 
its extension to cooperative production. If A finds after a 
while that B is not the only person with a taste for hand- 
made shoes, and that there are many other shoemakers like 
himself who desire to get away from the factory to become 
makers of shoes in their entirety, instead of makers of parts 
of shoes, he may undertake to bring them together and form 
a cooperative association for the production of shoes. If 
they all work together and either share equally the values 
produced, or each man keeps the value produced by himself, 
the position will be as though A and B only were concerned, 
there would be no exploitation. But suppose that A 
instead of organizing a cooperative association, simply per- 
suaded the other shoemakers to work for him for wages. 
Still the result would not be materially different. He would 
not be able to exploit them, simply because they could 
refuse to work for less than they could get working for the 
State. If they worked for less it would be because they valued 
the pleasure derived from the hand-work as being equal at 
least to the difference in their pay. So long as the manu- 
facture of hand-made shoes was continued upon a small scale 
the State would ignore it. This it would do for the simple 
reason that there would not be any popular resentment, 
the overwhelming majority of the citizens being content 



230 ELEMENTS OF SOCIALISM 

to wear the factory-made shoes. In all probability, the manu- 
facture of hand-made shoes would be regarded as a fad, and 
those who insisted upon having such shoes would be regarded 
as faddists. The private workshop and the cooperative 
workshop would be under the supervision of the State, 
which would be able to regulate the sanitary conditions, 
the hours of labor, conditions of employment, and if neces- 
sary, even the wages and the prices of the products. 

Such competition not dangerous: But suppose the indi- 
vidual or cooperative production of shoes should become 
popular and these forms of production should grow in 
importance as a result, would the Socialist State be seriously 
affected? Not at all. First, we must recognize the fact 
that if the demand for hand-made shoes became general the 
State itself would have to change its methods of production, 
or, at least, to add production by hand to machine produc- 
tion. If the demand should not become general enough to 
compel the State to do this, the voluntary enterprises might 
go on and grow until either they absorbed the greater part 
of the manufacture of shoes, or the citizens decided to take 
them over and make the hand production of shoes the general 
and dominant method. 

In other words, whenever the citizens of the State came 
to the conclusion that the social interest would be best 
served by putting an end to either one form of production 
or the other that would be the law. It is impossible, there- 
fore, to say that the Socialist State will never attempt under 
any circumstances to suppress individual or cooperative 
production. All that we are justified in saying is that the 
fundamental principles of Socialism do not involve such 
suppression of necessity, and that it is a reasonable assump- 
tion that in the absence of a general resentment of exploita- 
tion no such suppression need be expected. 

Industries specially adapted to voluntary enterprise: It 
may be freely conceded that there are many things not at 
all likely to disappear altogether which are admirably 
adapted to individual production. Articles of luxury made 
to meet individual tastes are essentially of this order. The 
manufacture of chairs, for example, might in general be 
carried on in State factories. But if one citizen of eccentric 
taste should demand a chair of special design and make — 



THE SOCIALIST STATE— ECONOMIC 231 

to be made from cigar boxes used by celebrities, let us say — 
it is more than probable that he would have either to make it 
himself as an avocation or set apart enough of his income to 
pay some individual who would like the task. In either case, 
no harm would be done to anyone. The individual would 
not be likely to accept the work for materially less than he 
could get making ordinary chairs in the State factory. If he 
got more, well and good; if he agreed to take less, regarding 
the special inspiration and pleasure of his work as an addi- 
tional reward, that, also, would be well and good. He would 
not be exploited. The State as employer would stand as the 
guarantor of his freedom, even if it did not interfere between 
him and his employer. 

Main divisions of industry under Socialism: There is, 
then, nothing in Socialism that is of necessity incompatible 
with private industry or industry carried on by groups of 
voluntary cooperation. All authoritative exponents of 
Socialism agree that the Socialist State may, and probably 
will, include three forms of production and exchange: (1) 
individual production and exchange; (2) cooperative pro- 
duction and exchange upon a voluntary basis; (3) production 
and exchange by the State. The limits of the first two 
have been sufficiently described, and it will, for the present, 
be a sufficient description of the third to say that it embraces 
all production and exchange which the people decide must 
be undertaken to secure freedom from exploitation of their 
labor and needs on the one hand, and satisfactory service 
upon the other hand. 

It is evident that, according to this analysis, the State 
under Socialism must assume an infinitely larger amount of 
economic power and responsibility than it now has, or than 
it ever has assumed in the past. While the scope left for vol- 
untary enterprise would be much larger than is generally 
supposed, it is nevertheless true that the great bulk of 
capitalist industry would have to be taken over by the State. 
All the social means of transportation and communication; 
all the extractive industries, such as mining and lumbering; 
all the public services now controlled by corporations, and 
all the principal manufactures would have to be under- 
taken by the State, subject to the provisions already laid 
down. 



232 ELEMENTS OF SOCIALISM 

Use of the word "State" : Thus far we have used the word 
"State" in connection with the socialization of industry in 
rather a loose way to describe organized society as dis- 
tinguished from groups of citizens. ^ We have used the term 
in one place to connote the political organization of the 
nation, and in another place to connote the political organiza- 
tion of the municipality. It is necessary, therefore, to point 
out that it is by no means implied in the Socialist theory 
or the Socialist ideal that all economic functions are to be 
centred in the political organization of the nation. Some 
forms of production and exchange are by their very nature 
best adapted to national organization. Mining, steel making, 
and means of interstate transportation and communication 
fall naturally into this group. Other forms of production 
and exchange are better adapted to the smaller unit of 
political society, the municipality. 

A centralized State not implied : It is impossible to classify 
the various forms of production and exchange and the eco- 
nomic functions which arise from them, and decide which 
will be undertaken by the nation and which by the State 
or city. Any attempt to do this would of necessity be useless. 
Socialism will inherit the forms evolved by capitalism and 
will have to begin with them. Where capitalist production 
has developed national organization, the Socialist State will 
start with that form, continue it if it seems best to do so, 
abandon it and adopt a process of gradual decentralization 
if that seems best. Where capitalist production has confined 
itself to local organization the Socialist State will, of necessity, 
begin with that, and either continue it or change it for a more 
centralized national form, according as experience may deter- 
mine. Favorable natural conditions and historical develop- 
ment have combined to make certain localities the centres 
of certain kinds of production. One city is thus primarily 
identified with the shoemaking industry; another with the 
manufacture of textiles; another with the manufacture of 
paper, and so on. It is highly probable, therefore, that under 
Socialism, these cities will continue for a long time, perhaps 
even permanently, to be identified with the same industries. 
Thus, one municipality will manufacture shoes, another 
paper, another steel, and so on. Other cities may not 
specialize, but produce a large proportion of the things 



THE SOCIALIST STATE— ECONOMIC 233 

necessary to their existence, and so be relatively independent, 
like the great independent city-states of the Middle Ages. 

The direction of industry : The State, still using the term 
in a general sense to designate organized society, must 
assume the functions now performed by the capitalist class 
as a whole, including the functions of the entrepreneur, in 
so far as these functions are in any manner necessary to the 
employment, organization, superintendence and direction of 
labor. But the relations between the State as employer and 
the worker as citizen will of necessity differ greatly from 
those which exist between the wage-earner and the capitalist 
employer. This fact has led to some interesting speculations 
concerning the manner in which industry will be organized 
and conducted. Some Socialists have suggested that the 
workers in each industry will control that particular indus- 
try, choosing their own superintendents, determining their 
own wages and hours of labor, and all similar matters, by 
popular vote. There is no reason why we should suppose 
that anything so anti-social and undemocratic will take place. 
The persons employed in a given branch of industry are not 
the only ones affected by it, and, therefore, interested in its 
management. Whether it is efficiently conducted or other- 
wise is a question which concerns society as a whole. If to 
have everything decided without reference to the workers 
would be undemocratic, it would be equally undemocratic 
to have the workers make the decision without reference to 
the rest of society. The probability is that all such matters 
will be decided by joint boards composed of representatives 
of the State and of the employees, with provision for the 
arbitration of matters upon which the joint boards cannot 
agree. Some Socialist writers point to the fact that the labor 
unions and employers' associations sometimes form such joint 
boards to determine wages, hours of labor and similar matters, 
and suggest that here is an organism already developed to 
discharge that function in the Socialist State. 

The remuneration of labor : When we come to consider the 
question of the manner in which labor will be remunerated 
in the Socialist State we are confronted at the outset by a 
very popular error. It is believed that Socialism involves 
equal remuneration to all workers, regardless of the nature of 
the services performed, and that the basis of remuneration 



234 ELEMENTS OF SOCIALISM 

must be the Marxian theory of value, each producer receiv- 
ing the value of his product, minus his share of the necessary 
social expenditures incurred through the government. Since 
all people can never be expected to produce exactly the same 
amounts, there seems to be a glaring contradiction in these 
two principles. So, in fact, there is, but the contradiction 
has nothing to do with Socialism, which is based upon 
neither of these principles, nor upon both of them combined. 
Equality of remuneration is not at all a necessary condition 
of Socialism, and there is probably no Socialist of standing 
who so regards it. Likewise, there is no Socialist of recognized 
authority who believes that it would be possible to deter- 
mine, even approximately, the contribution of each worker 
to the social product. The very nature of collective produc- 
tion makes it impossible to determine the share of any 
individual in the total product. Any attempt to do so would 
of necessity fail. Whatever the necessary basis for a Socialist 
system of remuneration may be, it is not the determination 
of the value of the individual labor product, and the pay- 
ment of value for value. Marx's theory of value, as we have 
seen, is not the basis of an ethical system of distribution 
to be realized in an ideal society, but a general explanation 
of the workings of capitalist society. 

The Socialist State will develop existing forms : We must 
never lose sight of the fact that the Socialist State will not 
be a fresh start in history, independent of the present State. 
It will be a development of the present State, and will 
inherit from the present State certain social forms and con- 
ditions. One of these forms is the wages system, and one 
of the conditions is that unequal payments are made for 
different kinds of services. Now, while it is quite conceiv- 
able that ultimately, after many generations of experiment, 
the wages system will be entirely discarded, and production 
and distribution based upon Louis Blanc's motto "From 
each according to his ability; to each according to his 
need" it is certain that a long period of time must elapse 
before society will have attained the degree of perfection 
jsary to the attainment of that ideal. 

The Socialist State will take the wages system and modify 
it to suit its own needs. Instead of being used as a means 
to exploit the producers, the wages form of remuneration 



THE SOCIALIST STATE— ECONOMIC 235 

would, under Socialism, be used to give to the workers a 
maximum of goods, or their equivalent, in return for the 
minimum of labor time compatible with social well being. 
The ideal to be aimed at is approximate equality of income, 
but in the meantime to make the standard of income as high 
as possible, letting the actual amount be determined by the 
free operation of the law of supply and demand. Suppose 
there should be an over-supply of labor in one branch of 
industry and an under-supply in another branch: in that 
case it might be necessary to reduce wages in the first and 
to increase them in the second, thus drawing some of the 
surplus labor to the place where labor is more needed. There 
is no reason at all why an unattractive piece of work, tedious, 
disagreeable, dirty or dangerous, should not be made attrac- 
tive, either by offering higher wages than the wages paid for 
other work, or the same wages for a smaller amount of labor. 
In this manner freedom of choice of occupation is possible, 
and compatible with the interest of society as a whole. 

Here, again, we must consider one of the popular shib- 
boleths of Socialism, the cry that the wages system must be 
abolished. What is meant is that the social relations in- 
volved in the wages system of to-day must be abolished. 
This result would be attained by the method here outlined. 
Instead of a money payment based upon the cost of the 
workers' subsistence, and as far from equal to the value of 
his product as possible, wages under Socialism would repre- 
sent as high a standard of living as the collective intelligence 
and skill could attain, and an approximation to an equal share 
in the products of labor, having due regard to the excep- 
tional services for which society, with the assent of its mem- 
bers, freely gives exceptional rewards. 

Disagreeable and dangerous work: We have somewhat 
anticipated the old question, Who will do the dirty and 
dangerous work under Socialism? We have dealt with it 
from one point of view only, however, and may now profit- 
ably discuss it from another point of view. Much of the 
dangerous and disagreeable work now done by human labor 
could be done equally well or even better by machinery, if 
we were socialized enough to demand it. A thousand illus- 
trations might be cited to support the contention of Professor 
Giddings that modern civilization does not need the drudgery 



236 ELEMENTS OF SOCIALISM 

and life-destroying labor of many of these occupations, that 
if they were suppressed inventive brains would quickly 
devise mechanical devices to do the work more effectively. 
When the British government forbade the employment of 
women and girls to do the heavy hauling underground in 
the mines — but not until then — mechanical devices were 
invented to do the work. When the conscience of England 
compelled the government to stop the practice of forcing 
little boys and girls through chimneys to clean them, mechan- 
ical devices were soon forthcoming. So it has been in every 
age. Most of the dirtiest, ugliest and most dangerous work 
of the world could be made clean, pleasant and safe, if only 
the inventive genius of the race were challenged to accom- 
plish that end. 

Unnecessary dirty and dangerous work: And then, too, 
it must be remembered that a great deal of this sort of work 
is necessary only to the. capitalist form of industry. Take, 
for example, the one matter of advertising: no one has ever 
computed the amount of dirty and even dangerous labor 
which it involves. And all through the anarchy of modern 
production runs the stream of waste labor, much of which 
is hard, dirty, disagreeable and dangerous. For the residuum 
of such labor which might remain, the irreducible minimum, 
Socialist society would be far better equipped than is capital- 
ist society. To-day no element of choice can enter into the 
doing of such tasks in the majority of cases, no idea of per- 
forming a social service. Those who undertake them are 
helpless and defenceless. When they fall to death society 
does not heed; when they do not fall to death, but live on 
doing the dangerous thing or the disagreeable thing, society 
does not feel grateful to them, but, on the contrary, treats 
them as pariahs and outcasts. In a society saturated with 
the social spirit, a true democracy, such tasks would bring 
rich rewards and those who performed them would be re- 
garded as heroes. 

Protection of the workers: In the industrial economy of 
the Socialist State the loss of a human life, or its needless 
impairment, would be a calamity. Under capitalism the loss 
of human lives is insignificant in comparison with the loss 
of dividends. Nowhere in the history of capitalism has any 
effort been made to reduce the appalling martyrdom of labor, 



THE SOCIALIST STATE— ECONOMIC 237 

the killing and maiming of the workers, except under press- 
ure, either of the State or of the organizations of the workers. 
Even the State of to-day, only partially democratic on its 
political side, and still less democratic on its economic side, 
shows a far higher regard for the life and health of the pro- 
ducer than the best capitalist concerns. When the most 
enterprising and best equipped capitalists in the world 
attempted to cut the Panama Canal, their efforts were 
attended by a terrible amount of human slaughter, the life 
and health of the workers was hardly considered at all. 
But when the work was undertaken by a great modern State, 
the slaughter ceased, proving once more that in all that 
counts for most, alike in quality of product and care of the 
human producers, the State, imperfect as it is, is more 
efficient than any capitalistic enterprise. In the Socialist 
State adulterating the food of the people to the detriment 
of their health, crowding them into disease-breeding hovels, 
exposing them to needless perils to life and limb in a passion 
for "cheapness" would appear in their true light as the most 
dangerous of all practices, more perilous to the State than 
besieging armies without its gates. Not only would the 
collective interest and intelligence demand that every possible 
protection be given to life and limb, but the State would, 
for its own interest, insure every worker against sickness, 
accident and old age. 

Credit functions : All the credit functions would of neces- 
sity have to be monopolized by the State in the Socialist 
regime. The place of credit would, of course, be much less 
important than now. Commercial credit as we know it 
would disappear. Credit to individuals might be necessary 
to some extent, and this the State could easily give upon 
terms which no private creditor could give and make a 
profit by the transaction. Credit and banking have never 
yet fulfilled their proper social functions. Credit has always 
been a means of oppression, as well as the basis for the 
gambling which goes on upon the produce and stock ex- 
changes. Whatever advantage there may be in a system of 
credit should be socialized, only its anti-social features being 
destroyed. 

Money under Socialism: Many of the older Socialists 
argued that the Socialist State must abolish money and 



238 ELEMENTS OF SOCIALISM 

substitute some form of "labor checks/ ' exchangeable for 
consumption goods at the public stores. Among recent 
writers this view has been expressed by the late Mr. Edmond 
Kelly. 1 This view is almost universally based upon the 
assumption that the Socialist State must accept the labor 
standard of value, and base upon it an ethical system of 
distribution. To most Socialists, however, the character of 
the medium of exchange seems a matter of very minor 
importance. There is nothing in the nature of Socialism 
which involves the abolition of money. It is not at all 
unlikely that future generations may be compelled to adopt 
some more stable standard of value than the gold standard, 
and to devise a more convenient medium of exchange. That, 
however, is pure speculation. All that can be wisely said 
here is that money, in practically its present form, will con- 
tinue to be the medium of exchange for a long time in the 
Socialist State, so far as it is possible to see at the present 
time. 

Land and rent : As we have already seen, there would be 
no reason for denying the right of individuals to the use- 
value of land. The security of the individual in this right 
would be guaranteed by the State, subject to the right of 
the State to take the land for any public purpose, a right 
with which we are already familiar, alike as a theory and 
as a practice of government. But while the State would not 
interfere with the private use of land, it could not in justice 
permit individuals to enjoy land rents. It would be obliged 
to tax the socially created value of land to the full, and it 
would be obliged, also, to deny the right of any individuals 
to hold land in idleness. Improvements upon land made by 
individuals, whether in the form of clearing and fertilizing 
the soil, or the construction of buildings, would be regarded 
as a direct contribution to the social wealth to be rewarded 
according to its value. 

Conclusion: In this rough outline of the economic struc- 
ture of the Socialist State, toward which society is apparently 
moving, there are many gaps. We have attempted to sketch 
only the main conditions which we believe must characterize 
the class-less industrial democracy of the near future. We 
have confined ourselves to those things which appear to be 

1 Twentieth Century Socialism, by Edmond Kelly, pp. 307-313. 



THE SOCIALIST STATE— ECONOMIC 239 

the necessary outcome of present conditions and tendencies. 
Such a State bears very little resemblance to the oppressive 
bureaucracy sketched by the enemies of Socialism. Far 
from suppressing individual freedom and initiative, such an 
economic system would provide the necessary soil for the 
development of a noble individualism, and for those fruits 
of a noble individualism, a great art, a worthy literature, a 
generous culture and a fraternal State. 



SUMMARY 

1. Socialism involves the collective ownership only of those things 
which are socially used. Social ownership is looked upon not as an 
end in itself, but as a means of abolishing exploitation. 

2. Where no exploitation is involved, private ownership will probably 
remain unchanged under Socialism. 

3. The Socialist State will develop existing forms, and it does not 
involve the establishment of a centralized bureaucratic regime. 

4. The Socialist State must assume a monopoly of credit functions 
and of final land ownership. 



QUESTIONS 

1. Why are Socialists indifferent as to the form of ownership of minor 
productive enterprises? 

2. Criticise the use of the phrase "abolition of private property." 

3. What is the principal aim of the Socialist movement? 

4. Give examples of industries apparently adapted to private enter- 
prise under Socialism. To voluntary cooperation. 

5. How may the disagreeable and dangerous work be done under 
Socialism? 

6. What is the Socialist attitude toward money and credit? 

7. What is likely to be the form of land tenure under Socialism? 



Literature 

See references at the close of the preceding chapter, also: Kelly, E., 
Twentieth Century Socialism, Book I, Chap. Ill, and Book III, Chap. I 
and II. 



CHAPTER XX 

SOCIALISM AND THE FAMILY 

Alleged antagonism of Socialism to the family: One of 

the most common ideas concerning Socialism, is that it would 
destroy the family organization. It is charged that the 
advocates of Socialism oppose the family based upon monog- 
amous marriage, and that they hope to destroy it and make 
sexual relations independent of any interference on the part 
of the State. Sometimes it is added that Socialism necessar- 
ily involves these things, and the most promiscuous sexual 
relations, according to the fancy and desire of the individuals. 
This is the substance of the criticism which is summed up 
in the charge that Socialism involves what is euphemistically 
called "Free Love." 

It is an old charge which has been levelled against nearly 
every great movement in history at some time or another. 
It was made against the early Christians. Centuries later 
it was made against Luther and his followers in the Protestant 
Revolt. In the political field we have one of the most con- 
spicuous examples of its use against the founders of the 
present Republican party. In Fremont's campaign, in 1856, 
the cry of "Free soil, free speech, free labor and free men," 
was parodied by the enemies of the new party into the 
insulting cry, "Fr&nont, free soil, free niggers and free 
women." 

Origin of the charge: Before we proceed to discuss the 
relation of Socialism to marriage and the family we may 
with advantage consider the origin of the charge that it is 
opposed to them and aims at the abolition of monogamous 
marriage. The criticism is a heritage of the modern Socialist 
movement from the Utopian movements of the past. 
Plato's Republic, as we have seen, communalized women as 
well as goods. The two forms of communism went together. 
It might almost be said that he anticipated most of the 

240 



SOCIALISM AND THE FAMILY 241 

ipodern theories of eugenics and stirpiculture. In his ideal 
commonwealth all sexual relations are regulated by the State 
and confined to persons possessing certain qualifications of 
age and physical, mental and moral fitness. As Professor 
Jowett has pointed out, 1 it was not "free love" at all, but 
rather a very highly developed form of State regulated 
stirpiculture, which eliminated personal choice and desire 
almost entirely. 

It is not difficult to understand Plato's motive. The 
essence of Utopianism is the faith that for all the ills of 
suffering humanity a remedy can be found or devised; that 
all its ill-working institutions can be set right. In this spirit 
of faith every institution which has not worked with perfect 
success has been subjected to the most searching criticisms 
and the most ingenious experiments by Utopian inventors. 
For minds of this type, the marriage relation and the family 
have at all times offered abundant challenge and opportu- 
nity. It must be confessed that, however sacred we may regard 
it as an institution of fundamental social importance, mono- 
gamic marriage is very far from being perfectly successful. 
The proportion of failures is unhappily great, so that mar- 
riage is spoken of as a lottery in which there are many more 
blanks than prizes. 

Religious origins of hostility to marriage : So universal has 
been the recognition of the comparative failure of all marriage 
systems that the passion for perfection has almost invariably 
led to one of two forms of opposition to marriage — the con- 
demnation of sexual intercourse, on the one hand, or sex- 
communism, on the other. This is especially true of religious 
movements based upon the desire for perfection. Thus, 
we have the celibacy of early Christianity and some of the 
later sects of religious communists, like the Shakers, for 
example, and the sex-communism of the Waldenses, the 
Anabaptists, and, in this country, the Perfectionists. No 
one can frankly study the history of sex-communism and 
its opposite, celibacy, without reaching the conclusion that 
both forms of hostility to marriage have commonly sprung 
from religious zeal and fanaticism. That all such schemes 
were inspired by the purest motives need not be denied, 
even by those who are most repelled by the schemes them- 

1 Introduction to Plato's Republic, 1st Ed. Vol. II, pp. 145-147. 



242 ELEMENTS OF SOCIALISM 

selves and the abuses which invariably attended them — 
such as licentiousness, sex-perversion and self -emasculation. 

Secular origins of sex-communism: Celibacy is almost 
always religious in its origin. The early Christian church 
stamped it as the highest ideal and marriage as at best an 
evil, a concession to the flesh, a carnal indulgence. Where 
antagonism to the family appears in connection with com- 
munistic movements it almost invariably takes the form of 
sex-communism, more or less strictly regulated. Rarely 
or never does it take the form of celibacy. The reasons for 
this are not difficult to discover. All such experiments in 
Utopia making are attempts to establish the basis of a new 
social order within the old order. Every precaution must 
be taken to exclude the hostile principles and influences of 
the old order, less they destroy the new ideal order in its 
cradle, so to speak. Private property and the inheritance 
of property being so closely identified with the separate 
family, it is easy to understand how the founders and invent- 
ors of communistic movements and schemes have almost 
universally regarded individual marriage and separate family 
life with fear as a certain means of reversion to the old 
order of private property. Next to this fear of the disin- 
tegrating influence of monogamic marriage and family life 
comes the fear that unless the State in some manner controls 
sexual relations and procreation, population must outrun 
the means of subsistence. We know now, however, that 
population always tends to abnormal and unsafe increase 
where the standard of life is lowest and there is most poverty 
and pressure. 

Modern Socialists and the charge: We have considered 
thus far only the chief sources of the hostility of communistic 
Utopias, both secular and religious, to marriage and the 
family. It is not strange that many honest and sincere 
men and women should believe that Socialism is but the 
modern expression of the same general aims, and that it 
seeks to abolish monogamic marriage and family ties. Nor 
is it strange that the enemies of Socialism in their defense 
of the present order should attempt to create prejudice 
against the movement by charging it with that purpose 
and aim. It may also be freely admitted that, like all 
popular movements directed against the existing order of 



SOCIALISM AND THE FAMILY 243 

society, the Socialist movement in its early stages attracted 
to itself many who were not really Socialists at all, but were 
merely in revolt against the existing social order, or some 
phase of it. Thus, in the early stages of the Socialist move- 
ment, the lines between the Socialists and the Anarchists 
were not at all sharply drawn. At such a period of the 
movement every one dissatisfied with existing conditions is 
welcomed, and so visionaries of all kinds naturally unite 
under the banner of Socialism and in its name advocate 
ideas which are not at all essential to the Socialist theory 
or the Socialist program. In this respect, again, the history 
of Socialism does not differ from that of Christianity. 

It is also true that individual Socialists of prominence in 
the present day Socialist movement have speculated freely 
concerning the future of monogamic marriage and the 
family, and the changes in them which must result from the 
reorganization of society, Among these v/e may mention 
August Bebel, the famous German Socialist leader, whose 
views are set forth in his book, Woman and Socialism, and 
William Morris and Ernest Belfort Bax, whose views are 
set forth in their joint work, Socialism, Its Growth and 
Outcome. Only the most foolishly narrow-minded would 
attempt to restrain or restrict honest thought upon a problem 
of such vast magnitude and importance, for it is only through 
such thinking that progress is made possible. At the same 
time, we must bear in mind that the Socialist movement 
has a right to say, as it does say, in fact, that such views 
are the views of the individuals responsible for them, not of 
the movement. The Socialist movement must be judged 
by its mass, not by a few individuals. The movement as a 
whole can no more be held responsible for the personal views 
of any man, however prominent he may be, upon the ques- 
tion of marriage, than for the views of other men upon 
vivisection, vegetarianism, prohibition, the Synoptic gospel 
or any one of a multitude of questions upon which men hold 
different opinions. 

We need not pay very much attention to that form of 
criticism which winnows the pages of Socialist history and 
gathers examples of individuals who have violated the ac- 
cepted code of morality, and makes the compilation the basis 
of an attack upon the Socialist movement and its propaganda. 



244 ELEMENTS OF SOCIALISM 

It must be said that there is not a party or a movement of 
any magnitude in all history which could not be attacked 
in the same way with at least as much success and justifica- 
tion as can the Socialist movement. One does not have to 
read far into the history of Christianity itself in order to 
discover evidences of unspeakable licentiousness and lust. 
Similarly, one does not need to read far into the history of 
Roman Catholicism to find the evidence of degenerating vice 
existing among clergy and laity alike, despite the most beau- 
tiful theories, the vice sometimes throned in the papal chair 
itself, as, for example, under Alexander VI. Likewise, one 
does not read far into the history of the Protestant Revolt 
before he encounters similar evidences of vice clothed by 
religion. Even in contemporary life it would not be at all 
difficult for an industrious enemy of religion to compile a 
formidable list of deeds of vice and crime committed by 
individual Christians, Catholics and Protestants alike. But 
to make such a list the basis of an attack upon Christianity 
in general, or upon Protestantism or Catholicism in partic- 
ular, would be puerile indeed. It is equally puerile to make 
the deeds of individual Socialists the basis of an attack 
upon the whole movement. 

Capitalism destroys marriage and family life : That mono- 
gamic marriage and family life do not flourish under the 
existing industrial system is an evident fact which has always 
afforded the propagandists of Socialism material for one of 
their strongest indictments of capitalism. Divorce has 
become so prevalent that marriage as an institution is hardly 
more stable than it was in Rome in the fifth century. If 
we add to divorce ihe widespread prostitution we are forced 
to the conclusion that monogamous marriage can hardly 
be regarded as the dominant characteristic of our sex rela- 
tions. 

Divorce : The first serious attempt to measure the magni- 
tude of the divorce problem was mad^in 1887 by the United 
States Department of Labor, under the direction of the late 
Carroll D. Wright. It was in many ways a disappointing 
Study, tor it revealed little more than the fact that within 
twenty years so many divorces had taken place, more than 
in any other country of the world except Japan. It seemed 
to justify the conclusion that a majority of the divorces were 



SOCIALISM AND THE FAMILY 245 

due, either directly or indirectly, to economic causes, but 
even there the study was sadly inconclusive. The one fact 
which stood out was that in the twenty year period, 1867- 
1886, the total number of divorce decrees was 328,716. The 
fact seemed alarming, but it was practically impossible to 
judge its real significance, for there was no way of telling 
how many marriages had taken place in the same period. 
In some of the states no records of marriages had ever been 
kept. 

In the year 1906 a new statistical study of the problem 
was begun under the direction of the Bureau of the Census, 
and completed in 1909. Owing in large part to the fact that 
the methods of registering and recording marriages in the 
various states had become fairly uniform since 1887, the 
new study affords a much clearer view of the problem than 
the old one. In the twenty year period, 1887-1906, the 
number of divorces was 945,625. In other words, marriage 
was dissolved at the rate of 47,281 cases each year, 3,940 
each month, more than 130 each day. The divorce rate 
increased faster than the marriage rate. One marriage in 
every ten is dissolved by divorce. The rate varies greatly 
in different states, ranging from zero in South Carolina, 
which does not grant divorce at all, to one in every four or 
five marriages in several other states. Two-thirds of the 
divorces are granted to women, the most frequent causes 
assigned being "desertion" and "cruelty," both of which 
terms are, in practice, largely mere technicalities, making it 
possible for either party to bring suit without heaping dis- 
grace upon the other. These reasons, therefore, are largely 
fictitious and serve to cloak the real reasons in a great many 
cases. This is indicated by the fact that few of the suits 
brought on these grounds are defended. 

There is perhaps hardly another subject concerning which 
so many popular generalizations are without foundation in 
fact: the divorce rate is not materially affected by the 
character of the divorce laws; alimony plays a very small 
part, for in eighty per cent of the suits brought by women 
alimony is not even asked for: divorce is not generally 
simply a means to "change partners," for divorcees do not 
marry at a greater rate than widows and widowers, nor does 
re-marriage take place sooner after the divorce than after 



246 ELEMENTS OF SOCIALISM 

bereavement, as a rule; divorce is not lightly resorted to, 
apparently, without a serious attempt on the part of both 
parties to endure the marriage bond, for most divorces take 
place after four years of married life, and the average is 
something over nine years; the divorce rates of Unitarian 
Massachusetts and Mormon Utah do not materially differ 
from that of Louisiana with its large percentage of Catholics; 
the "divorce colonies" at Reno and elsewhere do not mate- 
rially affect the problem, for eighty per cent of all divorces 
are granted in the State in which the marriage was con- 
tracted. More important than any of these factors, appa- 
rently, is the price of divorce, the cost of obtaining it. And 
this fact would seem to indicate that if the cost was so 
reduced as to make divorce accessible to all the number of 
divorces would be increased. Obviously, to increase the 
price so as to make it prohibitive to a still larger number of 
people would be no solution of the problem, and would 
simply create another class privilege. 

Prostitution: Another menace to monogamous marriage 
and family life is prostitution. There is, of course, no means 
of ascertaining the exact number of prostitutes or their 
patrons. It has been estimated 1 that there are from forty 
to fifty thousand professional prostitutes in New York City 
alone, and possibly as many more who occasionally add to 
their income in that manner. Averaging the best estimates 
available we get an estimate of 300,000 prostitutes for the 
whole of the United States. Appalling as it seems, this 
estimate is probably not too high. The number of men 
patrons of these women cannot be less than ten times as 
many. In other words, at least three million men are con- 
cerned in this worst of all forms of sex promiscuity. 

It would be exceedingly foolish to attempt to ascribe all 
prostitution to capitalism. Prostitution is much older than 
capitalism. It existed in Babylon, in Greece, in Rome, and 
all through the Middle Ages, sometimes under the guise of 
religion. It exists to-day in all parts of the world, in India 
as well as in the United States. Nevertheless, it is admitted 
by all students of the problem that poverty is one of the 

1 By lion. Elbridge T. Gerry and Police Superintendent Byrnes in 
L893 -//'/< statement of the former at the World's Congress on Social 
Purity in that year. 



SOCIALISM AND THE FAMILY 247 

main reasons why so many girls and women become prosti- 
tutes. The proportion of low paid workers who become 
prostitutes is exceedingly high, and, as we have seen in an 
earlier chapter, every period of depression in trade adds 
to the number. Whatever may have been the case in ancient 
times in those countries where the prostitute was honored 
above the wife, in modern society women do not voluntarily 
choose the life, except in rare cases. But it is not difficult 
to understand why women become prostitutes when it is 
remembered that it is probably true that there are more 
women who earn twenty-five hundred dollars a year by the 
sale of their bodies than there are women in all businesses 
and professions who earn an equal amount. The evil can 
never be remedied until the economic evils inseparable from 
capitalism are done away with. 

Masculine vice: So much for the woman's side of the 
problem. On the man's side there is also an important 
factor of economic causation to be considered, namely, the 
increasing difficulty of early marriage with an assurance of 
sufficient earnings to support a wife and family. The crowd- 
ing of young men into the big cities through the drift from 
the country, which is one of the most marked results of 
industrial evolution, naturally leads to the patronage of 
the brothel. The principle is not different from that which 
has at all times caused the brothel to flourish near the 
garrison in military centres. The income of the average 
young man may provide a comfortable living for himself, 
and even permit a higher standard of living than that to 
which he has been accustomed, but if it does not suffice 
to warrant founding a family the result is almost certain to 
be the development of a selfish indulgence which manifests 
itself in many forms — vice among them. 

Indirect economic causes: To these direct economic 
causes of prostitution must be added the indirect causes, of 
which the low standards of morality engendered by over- 
crowding and other poor housing conditions, and the forcing 
of boys and girls to work in the most dangerous period of 
adolescence where they must associate with large numbers of 
older persons and learn their ways, may be mentioned as 
examples. It is not necessary to go to the extreme of claiming 
that prostitution is solely due to economic causes in order 



248 ELEMENTS OF SOCIALISM 

to show that economic causes contribute very largely to its 
existence. 

Socialist criticisms of the family : A candid study of the 
criticisms of the family in modern Socialist literature will 
reveal the fact that most of it has been directed, not against 
marriage and family life, but against their abuse under 
capitalism, against the shortcomings due to the capitalist 
system. Thus, marriage for reasons other than love, for 
money, title, and social position, has been denounced as 
"legalized prostitution/ ' which ought to be abolished equally 
with the commoner and grosser forms of prostitution. But 
to say that marriage for money is a form of prostitution within 
wedlock, that no marriage is worthy the name which is not 
based upon affection, is not to attack marriage itself. On 
the contrary, it is to elevate marriage and attack one of the 
forces which militates against its success. The Socialist 
critics of society have as a matter of fact idealized marriage 
and made that ideal conception a club with which to attack 
capitalist society and capitalist class rule. By the employ- 
ment of young children, often in competition with their 
fathers; by forcing women to leave their homes and the 
care of their families to work in factories; by over-crowding 
in tenements, low wages, high rents, and numerous other 
evils, capitalism has done much to prevent the development 
of true monogamy and ideal family life. 

Such has been the substance of the criticism of Socialists 
from the very first. Marx and Engels, in the Communist 
Manifesto, declare it to be "self evident" that prostitution 
in all its forms, public and private, the legalized prostitution 
described above and the ordinary prostitution of the brothel, 
will disappear under Socialism. Passages from the Manifesto 
are sometimes torn from their context and quoted in an 
attempt to prove that Marx and Engels wanted to destroy 
marriage, but the deceitful trick is as foolish as it is dishon- 
orable. No honest mind can read the Manifesto without 
recognizing that so much of it as relates to the family is a 
vigorous criticism of those evils of capitalism which militate 
against the realization of anything like an ideal family life, 
and a declaration that under the new order those evils will 
vanish. 

Frederick Engels on the subject: In like manner, Engels, 



SOCIALISM AND THE FAMILY 249 

in his little book, The Origin of the Family, Private Property 
and the State, takes up the same theme and comes to much 
the same conclusion. Tracing the development of monogamy 
through the institution of private property and its bequest 
and inheritance, he comes to the conclusion that the eco- 
nomic causes which brought about monogamy are now about 
to disappear. This argument has sometimes been disin- 
genuously used by the enemies of Socialism to show that 
Engels advocated the abolition of monogamic marriage. 
Its use in that manner is as foolish and dishonorable as the 
similar use of the Manifesto referred to above. The argu- 
ment of Engels is as follows: monogamy arose through 
private property and the need of a system of bequest and 
inheritance. But it was one-sided monogamy. It applied 
strictly to women, and did not prevent men from indulging 
in polygamy, either secretly or openly. Now, the abolition 
of private property in the means of production, which is the 
overwhelming part of inheritable wealth, will not destroy 
monogamy. It will do away with prostitution, and, by 
placing woman upon a plane of equality with men, will make 
monogamy realizable — for men as well as for women. He 
accepts Bachofen's view that the progress from group marriage 
to monogamy was mainly due to women, and predicts that 
if woman is made equal to man politically and economically, 
there will be further progress toward real, complete monog- 
amy: "Remove the economic considerations that now force 
women to submit to the customary disloyalty of men, and 
you place women on an equal footing with men. All present 
experiences prove that this will tend much more strongly 
to make men truly monogamous, than to make women 
polygamous." 1 Engels refuses to make any forecast about 
the family, except that love will become the only motive for 
marriage once women's economic equality with man is 
established : 

"What we may anticipate about the adjustment of sexual 
relations after the impending downfall of capitalist produc- 
tion is mainly of a negative nature and mostly confined to 
elements that will disappear. But what will be added? 
That will be decided after a new generation has come to 
maturity: a race of men who never in their lives have had 

1 The Family, Private Property and the State, chap, iii, §4. 



250 ELEMENTS OF SOCIALISM 

any occasion for buying with money or other economic 
means of power the surrender of a woman; a race of women 
who have never had any occasion for surrendering to any 
man for any reason but love, or for refusing to surrender to 
their lover from fear of economic consequences. Once such 
people are in the world, they will not give a moment's 
thought to what we to-day believe should be their course. 
They will follow their own practice and fashion their own 
public opinion about the individual practice of every per- 
son — only this and nothing more." 1 

Socialists have no theories of marriage or the family : The 
foregoing lucid statement by Engels admirably epitomises 
the position of the Socialist movement of the entire world. 
Nowhere, at any time in the history of the movement, was 
it ever a part of the Socialist creed to abolish marriage or to 
weaken or transform the family. Everywhere, and at all 
times, the movement has aimed at the abolition of those 
forces which corrupt marriage and weaken and endanger 
the family. Socialism involves no theory of the origin of 
the family, no theory of its future development. All that 
it does is to perceive clearly the forces at work in society, 
forces inseparable from capitalism, which are to-day disin- 
tegrating monogamic marriage and the family. These forces 
it is opposing with all its might, and it may therefore be 
said to be the one great movement which tends to save the 
family from utter ruin, the one movement which makes for 
a perfect monogamy, the family which has its roots in the 
love of one man for one woman. 

That the Socialist State will, for its own preservation no 
less than for the sake of the children, exercise some control 
over marriage may be regarded as certain. It may be that 
it will make marriage a civil contract, compelling all persons 
to be married by a civil authority, according to certain civil 
forms, leaving them free to add any sacramental forms they 
choose so long as they are not in conflict with the civil law. 
At all events, it seems reasonably certain that marriages 
will have to be registered by the State, and parents held 
responsible for their children's welfare. It is also more than 
likely that the Socialist State will forbid the marriage of 
persons suffering from certain forms of disease and from 

l Op. tit., p. 101. 



SOCIALISM AND THE FAMILY 251 

certain physical and mental defects. So much seems certain, 
because it is already demanded by enlightened sentiment 
all over the civilized world. 



SUMMARY 

1. Nearly every great movement in history has been charged by 
its opponents with attempting to destroy the family. 

2. The disintegration of the family is rapidly taking place under the 
present social order. 

3. Many Socialists have criticised the shortcomings of the institu- 
tions of marriage and the family under Capitalism. 

4. Socialists as such have no theories in regard to the future of the 
family and have no desire to abolish it. 



QUESTIONS 

1. What is the origin of the charge of "free love" as directed against 
the Socialists? 

2. Discuss the origins of sex-communism. 

3. How does the existing industrial system affect the institution of 
marriage? 

4. Discuss the theories as to the cause of the increasing divorce rate. 

5. What restriction would a Socialist State be likely to impose upon 
the marriage relation? 



Literature 

"Bebel, August, Woman Under Socialism. 

Engels, F., Origin of the Family, Private Property and the State, 
Chap. II. 

Kelly, Edmond, Twentieth Century Socialism. 

Lichtenberger, J. P., Divorce. 

Morris, W., and Bax, E. B., Socialism, its Growth and Outcome. 
Chap. XXI. 

Spargo, John, The Spiritual Significance of Modern Socialism. 

Vail, Charles H., Modern Socialism. 



PART IV 

THE SOCIALIST MOVEMENT 



CHAPTER XXI 

THE RISE AND GROWTH OF MODERN SOCIALISM 

The background: The period from 1830 to 1848 witnessed 
the beginnings of the political activity of the proletariat. 
Capitalism was now fully established. The accession of the 
"citizen king" in 1830 marked the final triumph of the 
bourgeoisie in France, and the Reform Bill of 1832 destroyed 
the power of the land-owning aristocracy in England. As 
the old class struggle ended the newer struggle between the 
capitalist class and the proletariat assumed first importance. 

In England this new struggle at first took the form of an 
agitation for political democracy. The Working Men's 
Association was formed to carry on the agitation for the 
extension of the franchise to the working class. In 1838 
this association, aided by some radical members of the House 
of Commons, drew up a bill, the so-called "People's Charter," 
from which the movement derived the name Chartism. 
Great mass meetings were held in all parts of Great Britain, 
newspapers were established, the country was flooded with 
pamphlets and broadsides, and hundreds of thousands of 
names were signed to parliamentary petitions. In a very 
few years the Charter had undoubtedly won the moral 
support of a majority of the British people, but the follies 
of the leaders of the movement and their petty quarrels 
and jealousies caused many of its adherents to forsake it. 
Finally, the movement became merged into the general move- 
ment of Liberalism. 

In France the class conscious portion of the proletariat 
supported Louis Blanc in his agitation for the establishment 
of "social workshops," to be established by the State and 
operated and managed by the workers themselves under the 
general supervision of the State. Unlike many other 
Utopians, Blanc placed no reliance upon private capital. 
He regarded democracy as the first essential of social regenera- 

255 



256 ELEMENTS OF SOCIALISM 

tion. His social workshops were to develop through their 
superior merit until they absorbed the whole of capitalist 
industry. 

Another movement of a broader character, but less defi- 
nitely proletarian, had its roots in Mazzini's work for Italian 
unity and freedom. Following the Young Italy movement 
came the Young Europe Association, founded by some of 
Mazzini's followers. As an offshoot of this movement some 
German refugees in Paris formed the Young Germany 
Society. This society, under the various names of "League 
of the Just/' "League of the Righteous/' "Communist 
League" and "International Alliance" was more intimately 
connected with the later Socialist movement than any of the 
other organizations of the period. It was for the Communist 
League that Marx and Engels wrote the Communist Mani- 
festo. 

Conditions in 1847: By the year 1847 Utopianism had 
passed the climax of its strength. Owenism had never recov- 
ered from the failure of the experiments made in England 
and America, and was now an unimportant sect. Saint- 
Simonism had degenerated under the leadership of Bazard 
into an indecent travesty of Saint-Simon's ideas. Fourier- 
ism, discouraged by the catastrophic ending of the Brook 
Farm experiment, was fast losing ground. The only com- 
munistic movements which possessed real vitality were 
those represented by Cabet and Wilhelm Weitling. The 
Communism of both was essentially Utopian, but it was 
distinctly proletarian. Its basis was the crude class doctrine 
of the "Rights of Labor," and its appeal was based upon 
Brotherhood, Justice, Order and Economy. 

We have already considered Cabet in another chapter. 1 
Weitling alone among the Utopians was a man of the people, 
a true proletarian. By trade a tailor, during his wanderjahre 
he had come into contact with the Communist movement, 
and in 1838 published his first book, The World As It Is 
and As It Might Be. This was followed four years later by 
The Guaranties of Harmony and Freedom. Weitling was a 
proletarian agitator of the highest type, and in some features 
of his theory comes very close to some of the ideas of Marxian 
Socialism. He may be considered the personal connecting 

1 Sec p. 197. 



RISE AND GROWTH OF MODERN SOCIALISM 257 

link between the Utopian movements and modern, scientific 
Socialism. 

With Utopianism moribund, or being transformed into a 
proletarian movement, and the working class stimulated to 
political activity, the materials were ready for the develop- 
ment of a new and unified Socialist movement. This task 
was accomplished in the next generation, and the dominant 
personality in the new phase was Karl Marx. 

Biographical: Marx was born at Trier, Germany, in 1818. 
His father, Heinrich Marx, was a lawyer of prominence and 
comfortable fortune who held a government position. A 
Jew, the descendant of a long line of rabbis, he became a 
Christian in 1824, six years after the birth of his famous son. 
Karl Marx studied philosophy and law at Bonn and Berlin 
and received his doctorate at Jena in 1841. After the sup- 
pression of a radical daily newspaper of which he was editor, 
he went in 1843 to Paris, where he joined a remarkable group 
of radicals, among whom were Heine, the poet, the Anarchists 
Proudhon and Bakunin, and the Utopian Cabet. At this 
period Marx became interested in the teachings of Saint- 
Simon. 

It was in Paris, also, that Marx first met, in 1844, the man 
whose life was destined to be inseparably linked to his own, 
Frederick Engels. Two years the junior of Marx, Engels 
was the son of a wealthy German manufacturer who had 
large interests in Manchester, England, to which Engels 
eventually succeeded. The friendship and literary partner- 
ship of Marx and Engels lasted until the death of Marx in 
London in 1883, and was never clouded by a single quarrel 
or unpleasant difference of opinion. In 1845 the two friends 
went to Brussels and there organized the German Working- 
men's Club, a sort of labor union, one of the members being 
Wilhelm Weitling. 

In 1847 Marx and Engels and the whole Brussels group 
became affiliated with the International Alliance and pro- 
ceeded to bring about its reorganization. They had joined 
for this purpose at the request of a few of the more active 
spirits in the movement. A congress was called in London 
at which Marx was represented by Engels and Wilhelm 
Wolff, one of their staunchest supporters. On behalf of 
Marx, Engels and Wolff outlined a program which was 



258 ELEMENTS OF SOCIALISM 

approved, despite the bitter opposition of Weitling and his 
followers. These latter were thoroughly imbued with the 
conspiratory methods which had hitherto prevailed. They 
believed that secret organization and sudden uprisings were 
the only fruitful methods of working class action. The 
Marxian program, on the other hand, discouraged these and 
advocated open agitation and the building up of a great 
political party of the proletariat. Engels and Wolff having 
succeeded, a resolution was passed asking Marx and Engels 
to formulate a declaration of principles and a practical 
program for the movement. 

At a second meeting of the congress, in November, 1847, 
Marx was present and read the program and declaration of 
principles which he and Engels had prepared. The whole 
was a draft of the Communist Manifesto, and was enthusi- 
astically adopted. This made Marx and Engels the acknowl- 
edged leaders of the movement. 

The subsequent life of Marx and Engels was devoted to the 
Socialist movement, to the formulation of its theoretical 
basis and its tactics and policies. Marx published his 
Contribution to the Critique of Political Economy in 1859, 
the year in which Darwin's Origin of Species appeared. The 
first volume of Das Kapital appeared in 1867. Poverty, 
the exigencies of the movement and ill-health combined to 
prevent Marx from finishing the two remaining volumes, 
but after his death the manuscripts were completed and 
edited by Engels, who published the final volume just before 
his death in 1895. 

The Communist Manifesto: The new Marxian program 
was complete in January, 1848, and published in February. 
Its publication is usually considered as marking the begin- 
ning of the modern movement. The Manifesto was the first 
clear and definite statement of scientific Socialism. Its 
twenty-five pages of vigorous and incisive German sets forth 
the history and character of class struggles, the character 
of modern social classes, and the position of capitalism in 
industrial evolution. All this is interpreted as pointing out 
that the next stage in evolution will be characterized by the 
abolition of private capital and the socialization of produc- 
tion and exchange. 

The Manifesto was a rallying call to the proletariat, the 



RISE AND GROWTH OF MODERN SOCIALISM 259 

worked Declaration of Independence. Its inspiring keynote 
"Workingmen of all countries, Unite !" has been the watch- 
word of Socialism from that day to this. The Manifesto 
put an end to Utopian Socialism, The ideological conception 
of society with its resulting belief that capitalism must be 
regarded as a wicked invention by greedy and cruel men, to 
be destroyed by triumphant virtue, was effectually destroyed. 
The Utopian viewpoint could not again prevail as a basis for 
Socialist agitation, except locally and for very brief periods. 

But the proletariat was not yet ready to unite upon the 
great scale Marx and Engels had hoped for. Although they 
were not so sanguine as many of their followers, Marx and 
Engels underestimated the shortcomings of the proletariat 
and the forces of division. It is only after sixty years that 
a new generation is actually answering the rallying cry upon 
a grand scale and working effectively along the lines laid 
down by Marx and Engels in 1848. 

"Communism" and "Socialism": The use of the word 
"Communist" by Marx and his followers needs some explana- 
tion. In 1848, the word "Socialism," which had been first 
used to describe the theories of Robert Owen, was used to 
describe all forms of the decadent Utopianism. Marx and 
Engels desired to wean the movement entirely away from 
Utopianism. This fact alone would have caused them to 
avoid the use of the word "Socialism" in connection with 
their theories. On the other hand, the working class ele- 
ments to unite which the Manifesto was written were all 
known as Communists. The word "Communism" was there- 
fore the logical one to use to describe the aims of the move- 
ment. Since that time, however, the meanings of the words 
Communism and Socialism have been exactly reversed, and 
the latter word is used to describe the movement based 
upon the teachings of Marx, while the former word signifies 
the common ownership of all wealth, both in consumption 
and production goods. The most superficial examination of 
the Manifesto will show that Marx and Engels were not 
Communists in the modern sense of the word, but Socialists. 

The revolution of 1848: The day on which the Communist 
Manifesto was published in London saw the outbreak of 
revolution in Paris. The social discontent which Marx and 
his friends had sensed, and which many of them regarded as 



260 ELEMENTS OF SOCIALISM 

the sign of the coming of an immediate Social Revolution, 
broke forth in open revolt. Louis Philippe was driven from 
the throne and a Republic established. Nor was France alone 
affected. All Central and Western Europe felt the force 
of revolutionary activity, and it is not surprising that some 
of the Socialists believed that the Social Revolution had come. 
But when the excitement was over and the time for recon- 
struction had arrived it was soon discovered that the Revolu- 
tion was only the revolt of the bourgeoisie against the 
survivals of feudal restrictions. A real impetus was given 
to the democratic movement, however, and to that extent 
the proletariat was benefited. But at the end of the struggle 
capitalism was stronger than ever before, the proletarian 
leaders were driven to exile in most cases, and the new 
movement seemed to have been crushed at its very inception. 

As a concession to the proletariat, and in return for their 
assistance, Louis Blanc and two or three other leaders of 
the working class were given places in the French Provisional 
Government, and Blanc at once pressed his plan for the 
establishment of social workshops. So great was his follow- 
ing that the government did not dare to oppose him openly. 
National workshops were accordingly established, but in 
such a manner that Blanc denounced them and disclaimed 
all responsibility for them. Instead of employing skilled 
workers at productive work, the workshops were filled with 
a mob of incompetents who could not otherwise find employ- 
ment and were given unproductive labor. The result of the 
subsequent government investigation, and the confession of 
the director of the workshops, prove that they were estab- 
lished with the deliberate purpose of discrediting Blanc and 
his theories. 

The reaction: The uprisings of 1848 had accomplished 
little from the point of view of the proletariat, and the next 
few years record very little of interest except the literary 
work of Marx and the preparation of the leaders of the later 
movement. Most of the revolutionary leaders of France and 
Germany were in exile, and London was practically the 
only important centre of radical thought and activity. The 
movement fell into the hands of impatient advocates of 
immediate revolutionary uprisings, and in 1850 Marx with- 
drew from the Central Committee of the Communist Alliance 



RISE AND GROWTH OF MODERN SOCIALISM 261 

with a statement in which he warned the members that they 
would have to pass through "fifteen, twenty, fifty years' ' of 
strife in order to change conditions and make themselves 
fit for political power. The attitude of the majority he 
characterized as the substitution of revolutionary phrases 
for revolutionary evolution. 1 The Alliance survived the 
withdrawal of its leader barely two years, and for the next 
twelve years there was practically no formal organization of 
the Socialist forces. 

The " International": The next decade brought with it 
renewed activity. The Universal Exhibition at London in 
1862 brought together representatives of the working classes 
of England, France and Germany and did much to stimulate 
the feeling of working class solidarity. In 1864, largely 
through the inspiration of Marx, a congress composed of 
English workingmen and their sympathizers, revolutionary 
exiles from the Continent living in England, and delegates 
from France, Germany, Italy, Poland and Switzerland was 
held in London and resulted in the formation of The Inter- 
national Working Men's Association. 

The program of the Association was written by Marx, 
and was enthusiastically adopted after one offered by 
Mazzini had been rejected. It reaffirmed the principles of the 
Communist Manifesto and ended with the old rallying cry 
to unite. The "International" thus born rapidly extended 
to all the countries of Central and Western Europe and to the 
United States and Australia. It played an important part 
in the labor troubles which occurred in several countries, 
and for several years was an important force in international 
politics. Its congresses were devoted to the discussion of 
social and labor problems. Thus, the International was 
something more than a mere revival of the Communist 
League. It was the first real attempt to organize the workers 
internationally, embracing both the economic and the politi- 
cal forms of organization. The Communist League had 
touched only a few choice spirits. The Internationa), on 
the other hand, embraced practically all the organization 
of the workers, and its story forms one of the most stirring 
chapters in the whole history of the labor movement. 

Divergent elements: The declaration of principles to 

1 Quoted by Jaures, Studies in Socialism, p. 44. 



262 ELEMENTS OF SOCIALISM 

i 

which all members of the International had to subscribe 
was essentially a Socialist document. It set forth that the 
emancipation of the working class must be the work of the 
workers themselves. The struggle for this emancipation 
is not a struggle to place the workers in the position of a 
ruling class, but a struggle to abolish all forms of class rule. 
The economic dependence of the workers upon those who 
own and control the instruments of labor forms the basis of 
every kind of servitude, social misery and spiritual degrada- 
tion. Therefore, every political activity of the working 
class must be directed to their economic emancipation. 

But the International comprised many elements to whom 
the declaration of principles meant very little. Its greatest 
weakness as well as its greatest strength lay in the fact that 
it embraced too many diverse elements. Although Marx 
was its dominating spirit, the International was by no means 
unitedly pledged to his principles. In addition to the real 
Marxists there were those who still believed in conspiratory 
action, those who followed Proudhon, those who relied solely 
upon the power of the trade unions and those to whom 
nothing was important except political democracy. To 
Marx the most important need of the time seemed to be the 
union of the workers. Everything else must be subordinated 
to that end. Thus we find many compromises and contra- 
dictions in the history of the International, as, for example, 
when the Geneva Congress in 1866 defeated an amendment 
in favor of an eight-hour work day and adopted a resolution 
in favor of ten hours, and when the Lausanne Congress, in 
1867, passed a resolution declaring that only in individual 
cases, where the father was incapacitated, should the State 
undertake the education of children! 

Decline of the International: After the congress of 1868 
the Russian Anarchist, Michael Bakunin, joined the Inter- 
national and precipitated a conflict between the Anarchist 
members and the followers of Marx. The struggle became a 
titanic intellectual duel between Marx and Bakunin, the 
two men who even now are regarded as the foremost repre- 
sentatives of their respective movements. Marx was vic- 
torious, but in the victory the International itself was de- 
stroyed. In 1872, in order to avert further danger from the 
anarchists, the seat of the General Council was transferred 






RISE AND GROWTH OF MODERN SOCIALISM 263 

to New York, where Marx had a considerable following 
among the German exiles. This removal was designed 
simply to hide for a time the fact that the International was 
destroyed in order to keep it out of the hands of Bakunin. 
In 1876 a "congress" of eleven delegates met in Philadelphia 
and formally dissolved the organization. 

The form of organization died, but the work and the 
spirit of the International remained. It had, in some degree, 
accomplished the international unification of the proletariat 
and inspired it with a consciousness of proletarian solidarity. 
More than that, it had materially aided the formation of 
Socialist parties in several countries. 

The "New International" : The later history of the inter- 
national Socialist movement must be considered in its sepa- 
rate national phases. Before the decline of the International 
the rise of the German Social Democracy had already marked 
the beginning of a new era in the history of Socialism. From 
1872 to 1889 the strength of Socialism grew steadily through- 
out Europe and America, preparing the way for a new 
International. 

On July 14, 1889, the first of a new series of international 
congresses was opened in Paris, and the event was hailed 
as the establishment of a New International. The subsequent 
congresses of the international Socialist movement have been 
held at Brussels (1891), Zurich (1893), London (1896), Paris 
(1900), Amsterdam (1904), Stuttgart (1907), and Copen- 
hagen (1910). In conjunction with the Stuttgart Congress, 
an International Congress of Socialist Women was held, 
representing the women's movements of the leading coun- 
tries. This was repeated at Copenhagen and has now 
become a permanent feature of the international movement. 
The new International is really a federation of autonomous 
national Socialist parties, united for the common purpose 
of bringing an end to the world-wide system of capitalist 
exploitation. It is united in its adherence to the funda- 
mental theories of Marxian Socialism. As an organization 
it exercises no authority over the various affiliated parties, 
either in matters of theory, program or methods. Since 1900 
a permanent International Socialist Bureau has been main- 
tained at Brussels, with a secretary who is the one permanent 
and paid officer of the International movement. The 



264 ELEMENTS OF SOCIALISM 

bureau itself consists of non-resident delegates from every 
Socialist party affiliated with the International. 

The growth of the international party has been rapid, and 
at the present time (1911) its total voting strength is esti- 
mated at over nine millions. Its greatest numerical strength 
is in the four countries of Germany, France, Austria and the 
United States, in the order named. Considered in propor- 
tion to population the order would be very different. Finland 
and Belgium rank with Germany, while the United States 
falls very far down the list. 



RISE AND GROWTH OF MODERN SOCIALISM 265 



SUMMARY 

1. The period from 1830 to 1848 was marked by the decline of Uto- 
pianism and the rise in Western Europe of broader proletarian move- 
ments. 

2. The era of modern Socialism begins with the Communist Mani- 
festo of 1848, which first outlined the principles upon which it is based. 

3. The International Workingmen's Association was the first great 
Socialist organization, but it was composed of many divergent elements 
and was wrecked by the dissension between the Socialists and the 
Anarchists. 

4. The "New International" dates from the Congress of Paris in 
1889. It is a federation of autonomous national Socialist Parties, 
having a combined voting strength of over 9,000,000. 



QUESTIONS 

1. What is the significance of Chartism in the history of the Socialist 
movement? 

2. What is the place of Weitling in Socialist history? 

3. What were the points of difference between Weitling and the 
Marxians in 1847? 

4. Discuss the bearing of the Communist Manifesto upon the subse- 
quent Socialist movement. 

5. Why did Marx and Engels call themselves Communists instead 
of Socialists? 

6. What results did the Revolution of 1848 accomplish? 

7. Describe the characteristic features of the International. 

8. What were the elements of weakness in the International? 

9. Describe the form of organization of the "New International." 



Literature 

Ely, R. T., French and German Socialism in Modern Times. 

Hunter, Robert, Socialists at Work, Chap. X. 

Kirkup, Thomas, A History of Socialism. 

Rae, John, Contemporary Socialism, Chap. Ill and IV. 

Spargo, John, Karl Marx, His Life and Work. 



CHAPTER XXII 

the national socialist movements 

(1) Germany 

Origins: Through priority of origin as well as present 
strength, the German Social Democracy claims our first 
consideration. The most prominent figure in the early 
history of the German movement is Ferdinand Lassalle. 
While Marx and Engels were both Germans, they were in a 
very special sense cosmopolitans, and each of them spent 
his life outside of Germany. Lassalle was born in 1825. 
Like Marx, he was of Jewish descent. At the age of twenty- 
three he joined the Socialist wing of the revolutionary move- 
ment of 1848, his activities leading to his imprisonment for 
six months and exclusion from Berlin for ten years. His 
first real opportunity came during the bitter struggle of 1862 
in which Bismarck became master of Prussia. He entered 
political life with a vigorous propaganda by lectures and 
pamphlets in which he differed from the other political parties 
and subordinated the political aspects of the struggle to its 
social aspects. He had at first contemplated joining the 
Liberals, but found them half-hearted in their advocacy of 
democracy. It was then that he proposed the formation of 
an independent Socialist party. The proposal met with a 
ready response, and in May, 1863, the General Working- 
men's Association was founded with Lassalle as its president. 
The Association adopted a program, written by Lassalle, 
which aimed chiefly at the abolition of the three-class system 
of voting, which still obtains in Prussia. During the remainder 
of his short life Lassalle worked for the cause with feverish 
activity, writing, lecturing and organizing with almost 
superhuman energy. In August, 1864, just fifteen months 
after the formation of the new party, Lassalle was mortally 
wounded in a duel, and his brief but remarkable career was 
thus brought to an ignoble end. 

266 



THE NATIONAL SOCIALIST MOVEMENTS 267 

As a revolutionary agitator Lassalle stands almost without 
a peer. That no little of the sensational success which 
attended his agitation was due to favorable circumstances 
rather than to any personal qualities may be granted. The 
fact remains, however, that he was a man of remarkable 
talents. At the same time his defects of character were 
serious. He was vain, lacking in self-restraint and essentially 
an aristocrat. His manner of life was that of a self-indulgent 
man of fashion, and he did not always place the interests 
of the proletarian movement above his personal pleasures 
and ambitions. 

The period of organization : After the death of its leader 
the General Workmgmen's Association went through a 
period of depression. Lassalle had been practically a dictator 
and the association had therefore not developed self-govern- 
ment. The movement proved to be something more than a 
personal following of Lassalle, however, and after some three 
years of difficulty began to make considerable progress, 
especially in Prussia and North Germany. Meanwhile a 
rival organization had grown up in Saxony, South Germany, 
under the leadership of Wilhelm Liebknecht and August 
Bebel, followers of Marx. In 1869 this Southern association 
met in convention at Eisenach and organized the Social 
Democratic Workingmen's Party. Both the Lassallean and 
the Eisenach elements were represented in the North German 
Diet, seven Socialists being elected to that body in 1867. 

The Franco-Prussian War checked the Socialist agitation 
for a short time, and in the first elections to the German 
Reichstag only two Socialists were elected. The parties 
soon revived, however, and in 1874 their combined vote was 
340,000, nine representatives being elected to the Reichstag. 

Union of the two parties : Both the Eisenach, or Marxist, 
party and the Lassallean association had met with persecu- 
tion from the police at every step since their organization, 
and by this time the need for unity of the two forces had 
long been apparent and discussed. While the two organiza- 
tions had a common object there were a number of differences 
in theory and tactics — the differences between the theories 
and tactics of Marx and those of Lassalle. 

The union of the two factions was finally effected at Gotha, 
in 1875. The Lassalleans were in the majority, and in the 



268 ELEMENTS OF SOCIALISM 

interests of harmony the leaders of the Marxist forces con- 
sented to the program drafted by the Lassalleans. By far 
abler than the leaders on the other side, the Marxist leaders 
manifested great wisdom and courage in taking this step, 
despite the protests of Marx himself. The program opens 
with the statement that ' 'Labor is the source of all wealth 
and all culture, and as useful work in general is possible 
only through society, so to society, that is to all its members, 
the entire product belongs; while as the obligation to labor 
is universal, all have an equal right to such product, each 
one according to his reasonable needs/ ' This, together 
with the reference to the "Iron Law of Wages" in the follow- 
ing section, is purely Lassallean, as is the demand for 
"Socialistic productive associations with State help under the 
democratic control of the laboring people." 

Marx wrote from London a bitter denunciation of the pro- 
posed program. He was not opposed to union. On the 
contrary, holding that "Every step of real movement is 
worth a dozen programs," he would have had them unite 
upon almost any basis except that of a program which he 
regarded as fundamentally false. He attacked the Lassallean 
principles contained in the program and denounced them as 
"utterly condemnable and demoralizing to the party." 
Had this letter been published at the time it would have 
defeated the efforts to unite the two elements. The letter 
was not published until many years afterward, however, and 
although Marx was furious at the time, on account of the 
rejection of his advice, time has shown that the defects of 
the Gotha program were not important enough to offer a 
real barrier to the progress of the movement. 

The "exceptional laws" : At the election of 1877 the united 
party polled half a million votes and elected twelve members 
to the Reichstag. This revelation of the strength of the 
movement aroused and frightened Bismarck. His rule was 
challenged and he answered with repression, the Junker 
dominating the statesmen. A pretext for the repression was 
found in the attempts made upon the life of the Kaiser by 
two irresponsible fanatics. Although it was very evident 
that the Socialists had nothing to do with either attempt, 
Bismarck accused them of complicity and forced through the 
Reichstag severe laws which suppressed all Socialist news- 



THE NATIONAL SOCIALIST MOVEMENTS 269 

papers, the holding of public meetings, and even the formal 
organization of the party. During the remainder of Bis- 
marck's rule the only forum open to the Socialists was the 
tribune of the Reichstag itself. The affairs of the party 
had to be conducted largely from Switzerland, even its 
official organ, the Sozial Demokrat, being published from 
there and smuggled into Germany. 

For a time the growth of the party was checked. The 
voters were openly intimidated and many of the leading 
Socialists were exiled. In 1881 the vote of the Social Demo- 
crats fell to 312,000. But a movement like Socialism thrives 
on oppression, and when in 1890 the Social Democrats polled 
1,427,000 votes, three times the vote of 1877, the govern- 
ment abandoned Bismarck's policy of repression and the 
exceptional laws were repealed. 

The Erfurt Congress: In 1891 the party was again per- 
mitted to hold a convention upon German soil. It met at 
Erfurt and adopted a new program in place of that adopted 
at Gotha. The Erfurt program eliminates all the semi- 
Utopianism of Lassalle, and is one of the best short state- 
ments of Marxian Socialism ever made. It begins as follows: 

"The economic development of the bourgeois society 
leads by a necessity of nature to the downfall of small 
production, the basis of which is the private property of the 
workman in his means of production, and transforms him 
into a proletarian without property, whilst the means of 
production become the monopoly of a comparatively small 
number of capitalists and great land-owners." 

The program goes on to describe the class struggle, and 
the necessity of collective ownership of the means of pro- 
duction for the emancipation of the proletariat. This social 
transformation at the hands of the working class must 
come through political action, and in emancipating them- 
selves they will free humanity. The specific demands are 
well stated, and the whole program is an indication of the 
great intellectual advance made by the party in the sixteen 
years which had elapsed since the Gotha Congress. The 
Erfurt program still stands as the theoretical basis of the 
German Social Democracy after twenty years of experience 
and criticism. 

Later growth: The strength of the Social Democrats has 



270 



ELEMENTS OF SOCIALISM 



steadily increased since the Erfurt Congress. The following 
table shows the growth of the party's electoral strength 
since the establishment of the Empire: 

TABLE VI 
GROWTH OF THE SOCIALIST VOTE IN GERMANY 



Year. 


Socialist 
Vote. 


Percentage 

of 
Total Vote. 


Members 
Elected to 
Reichstag 


1871 


124,655 

351.952 

493,288 

137,158 

311,961 

549,990 

763,128 

1,427,298 

1,176,738 

2,007,076 

3,008,000 

3,258,968 

4,400,000 


3.0 

6.8 

9.1 

7.6 

6.1 

9.7 

10.1 

19.7 

23.3 

24.0 
24.3 
40.0 


2 


1874 


9 


1877 


12 


1878 


9 


1881 


12 


1884 


24 


1887 


11 


1890 


35 


1893 


44 


1896 


57 


1903 


81 


1907 


43 1 


1912 


110 







The gain in the total vote in 1907 was made in the face 
of a concerted campaign against Socialism made by the 
government and all the other parties of the Empire. Every 
Socialist candidate met with a united opposition supported 
by almost unlimited funds. Over ten million anti-Socialist 
pamphlets were distributed, and speakers were sent to every 
possible social and literary club. The chief cause of the 
relative weakness of the Social Democrats in the Reichstag 
lies in the fact that the Empire has never been redistricted. 
The great cities, which are the strongholds of the Socialists, 
have the same number of representatives that they had in 
1871. The Centre, or Roman Catholic, party — which is next 
to the Social Democracy in numerical strength — has its 
strongholds in those sections of the country which have not 
materially increased their population since 1871. Although 
this party polled only 2,183,384 votes in 1907, or 1,075,584 
votes less than the Social Democrats, it had 108 representa- 

1 Increased to 52 in the by-elections between 1907 and 1911. The 
report of the party to the International Congress at Copenhagen in 1910 
showed that the party had also 185 representatives in the various 
parliaments of the federated States of the Empire. 



THE NATIONAL SOCIALIST MOVEMENTS 271 

tives in the Reichstag as against the 43 of the Social De- 
mocracy. 1 

The dues-paying party membership has increased 57.7 
per cent since the election of 1907, the total number in 1911 
being 836,562. In the nine by-elections which took place 
in the year ending August 1, 1911, the party vote averaged 
47.37 per cent of the total vote cast, as against an average of 
40.46 per cent in the contested elections of 1907. The Social 
Democracy controls many of the larger German cities, and has 
at present 8,910 municipal representatives in the Empire. 2 

Revisionism: Within recent years a movement for a 
moderation of theoretical statement and for opportunism 
in political tactics has grown up within the party and been 
greatly exploited by the non-Socialist press. The best 
known representative of this movement is Eduard Bern- 
stein, a trusted leader of the party from the early days of 
the exceptional laws. The principal points upon which he 
centres his attack on the accepted theories of Socialism 
have been dealt with elsewhere. Bernstein's book, Die 
Voraussetzungen des Sozialismus? made a tremendous sensa- 
tion when it appeared in 1899. Although the proposals of the 
Revisionists have always been defeated by large majorities in 
the party congresses, they have gained steadily in influence. 

At the Magdeburg Congress in 1910 the point at issue 
between the two elements was on a question of practical 
tactics. One of the strictest rules of the party is that its 
representatives must not, under any circumstances, vote for 
the budget of the government. The argument is that such 
an act would be voting money to an anti-Socialist govern- 
ment. It happened that in the Grand Duchy of Baden the 
Socialists held the balance of power between the liberal 
government and a conservative clerical opposition. Deem- 
ing it unwise to play into the hands of the latter, the Social- 
ists, led by Dr. Frank, voted for the budget. At the Magde- 
burg Congress, Bebel moved a resolution mildly censuring 

1 In January, 1912, the Social Democracy became the strongest single 
party in the Reichstag, the Centrists returning only 93 members. 

2 Vide Report of Executive Committee to Party Congress at Jena, 
Sept., 1911. 

3 Published in English translation under the title, Evolutionary 
Socialisnij New York, 1910. 



272 ELEMENTS OF SOCIALISM 

the Baden leaders. For Dr. Frank, who is one of the ablest 
and best loved men in the German party, Bebel expressed 
his affectionate regard, calling him his youngest son, his 
Benjamin. But while the resolution of censure was as mild 
as it was possible for such a resolution to be, BebePs attack 
upon the position taken by Dr. Frank and his colleagues 
was keen and bitter. At an evening session, Dr. Frank 
announced that he and his colleagues could not agree to 
abide by the resolution. Aroused by this declaration, the 
"orthodox" element insisted then and there upon adding a 
rider to the resolution warning the Baden delegates that in 
the event of their refusing to obey the resolution they would 
be expelled from the party. Realizing the seriousness of his 
position, Dr. Frank begged the Congress to adjourn the 
discussion until the next morning. This the Congress 
refused to do and Dr. Frank and some sixty delegates with- 
drew from the Congress, whereupon the rider was adopted. 
Bebel, who had not been present during the evening session, 
was greatly grieved when he learned what had taken place. 
Of course, the event was widely hailed as a "split" in the 
ranks of the party. That it came perilously near to a 
disastrous break in the solidarity of the party is freely 
admitted. Later Dr. Frank and his colleagues came back 
to the Congress and gracefully accepted the decision of the 
majority. The event proved to the world the strong sense 
of party loyalty and unity which dominates the German Social 
Democracy. 

The Social Democracy and trade unionism: The industrial 
development of Germany was late in beginning and the first 
trade unions were not organized until the inception of the 
Socialist movement. From the very first the Marxist ele- 
ment favored the formation of workmen's associations 
(Gewerkschaften) and the Lassallean element from 1869. 
Thus the two movements have largely developed side by 
side, and there has never been the bitter misunderstanding 
and hostility which has marked the relations of the two 
movements in England, where the trade union movement 
was already well established when the modern Socialist 
movement appeared. The political party and the industrial 
organization are regarded as equal parts of one movement. 
This has given the Social Democracy a great advantage, 



THE NATIONAL SOCIALIST MOVEMENTS 273 

for the rapid industrial development of the country has 
forced a corresponding growth of the trade unions, and this 
in turn has meant a constant increase in Socialist strength. 
The great bulk of the trade unions of Germany are Social- 
istic in their sympathies. There are, however, some minor 
non-Socialist unions which are called "Yellow Unions" in 
contradistinction from the "Red Unions," which support the 
Social Democrats. The total trade union membership is 
about two and a haff millions, two millions belonging to the 
"red" unions and half a million to the "yellow" unions. 

Leaders of the Social Democracy: The foremost of the 
older political chiefs of the party was Wilhelm Liebknecht. 
A lineal descendant of Martin Luther, Liebknecht was born 
into the same educated middle class as Marx. As early as 
1848, when he was twenty-two years of age, he became 
connected with the revolutionary movement, and was one 
of the group of exiles which gathered around Marx in Lon- 
don during the period of reaction. He was one of the 
founders of the Eisenach party, and one of those primarily 
responsible for bringing about the unity of the movement 
at Gotha. He was elected to the North German Diet in 
1867, and was a member of that body and of the German 
Reichstag the greater part of his life from that time until 
his death in 1900. He served many terms of imprisonment 
for the cause he loved and served so well. 

August Bebel, a master turner and largely self-educated, 
the present leader of the German party, has often been 
called the ablest parliamentary debater in Europe. After 
Liebknecht returned to Germany, in 1862, Bebel, who was 
already active in the trade union movement, but was not a 
Socialist, formed an acquaintance with him. In 1866 Bebel 
definitely allied himself with the Socialist movement of the 
time, and later became one of the founders of the Eisenach 
party. While admitting the influence of Liebknecht, Bebel 
himself says that he came to Marxism by way of Lassalle. He 
entered the Reichstag soon after the establishment of the 
Empire and is still an active member of that body. 

The foremost theoretician of the party is Karl Kautsky. 
He is perhaps the foremost living authority upon Marxian 
Socialism. In some respects he is carrying on the work of 
Frederick Engels just as Engels carried on the work of Marx. 



274 ELEMENTS OF SOCIALISM 

The older leaders of the German party are rapidly giving 
place to younger men, and there has been a noticeable 
increase in the proportion of leaders who have themselves 
come from the working class. There are two reasons for this: 
First of all, the proletariat is becoming more self-reliant 
and no longer has to depend upon middle-class "intellec- 
tuals" to the same extent as in earlier days. Secondly, 
class lines are being drawn more closely in German politics, 
and relatively fewer men of the type of Marx, Lassalle, and 
Liebknecht leave their class to cast their lot with the pro- 
letariat. 

Among the noteworthy younger leaders of German Social- 
ism may be mentioned Karl Legien, the leader of trade 
unionism, George Ledebour, a powerful orator and debater, 
Albert Sudekum, the leading authority in Germany on 
municipal problems, and Herman Molkenbuhr, the present 
floor leader of the party in the Reichstag. 

The women's movement: The party maintains a Social 
Democratic Women's Bureau for the purpose of carrying on 
special propaganda among proletarian women. There are 
at present (1911) 107,693 women who are dues-paying 
members of the party. Women take a very prominent part 
in the affairs of the party. The first National Women's 
Convention of the party was held in March, 1911, and was 
effective in emphasizing the party's strong support of woman 
suffrage. The best known of the women leaders of the party 
are Clara Zetkin, an able agitator and editor of Die Gleichheit 
("Equality"), a paper which has 95,000 subscribers, 1 and 
Rosa Luxemburg, best known on account of her writings and 
speeches in support of the extreme Left of the party. 

Much attention has been given to the juvenile movement. 
Until 1908 there were two central organizations of Young 
Socialists under the leadership of Karl Liebknecht, the son 
of Wilhelm Liebknecht. In that year a law was passed 
making such organizations illegal, but the party has found 
a way to maintain the essential features of the movement 
without formal organization. 

Press, literature and education: The number of daily 
newspapers owned and controlled by the party has increased 
from 65 to 87 since 1907, and their combined circulation is 

1 Report to Jena, Congress, 1911. 



THE NATIONAL SOCIALIST MOVEMENTS 275 

well over a million copies a day. These papers are published 
in fifty-seven printing establishments owned by the party. 
There are also many weeklies and monthlies. Germany 
takes the first place among the nations in the character and 
quantity of its Socialist literature, particularly in the field 
of theory. The work of the leading German writers has 
been translated into all European languages, and until 
very recent years was the chief literary support of the world 
movement. The party maintains a permanent school at 
Berlin for the training of writers and speakers, and carries 
on a very vigorous educational propaganda throughout the 
country. 

(2) France 

Foundations of French Socialism: As we have already 
seen France played a brilliant part in the earlier Utopian 
phases of the Socialist movement. Many writers have con- 
sidered Socialism to be essentially French in its origin 
dating from the Encyclopedists, notably Rousseau, in whose 
works we do find some glimmerings of Socialist philosophy. 
Through Morelly and Mably these ideas were continued 
and developed down to the Revolutionary period, when the 
works of Boissel and Babeuf appeared. Then came Saint- 
Simon, Fourier, Cabet and Louis Blanc. The latter came 
nearest to modern Socialism but his work did not give rise to 
a permanent movement. After 1848 French radical thought 
was dominated for many years by the Anarchism of 
Proudhon and Blanqui, during which time Marxian Socialism 
hardly obtained a foothold in the land where Marx had first 
declared himself a Socialist. 

The International Working Men's Association had been 
the outcome of the visit of French workingmen to London 
in 1862, and the organization was always numerically strong 
in France. But the French members were Anarchists rather 
than Socialists and always voted against collectivist proposals. 
M. de Molinari said in 1869 that out of every ten French 
workingmen who had any interests beyond eating and drink- 
ing, nine were Socialists, but he used the word Socialism 
to include all kinds of radicalism, especially the schools of 
Proudhon and Blanqui. The crushing defeat of the Paris 



276 ELEMENTS OF SOCIALISM 

Commune, followed by the speedy disruption of the Inter- 
national, served to scatter still further the forces of the 
French proletariat. The Commune had no connection with 
Socialism, being simply a protest of Paris against the humil- 
iating peace of 1871, and a demand for municipal autonomy. 
All the radical forces, including those represented in the 
International, joined in the movement, and all suffered from 
the punitive measures adopted by the government. 

Rise of the new Socialism: During the first years of the 
Third Republic the chief centres of Socialist activity were 
small groups, called "Students' Circles/ ' organized by Jules 
Guesde and Gabriel Deville. Guesde is one of the heroic 
figures of the international Socialist movement. A revolu- 
tionist from his youth, the first object of his attack was the 
Bonapartist Empire. He served six months in prison in 
1865, when he was twenty years of age, and six years later 
led the republicans in the capture of Montpellier. Sentenced 
to exile or imprisonment for five years, Guesde chose exile 
and went to Geneva, where he came into touch with the 
Socialists. He soon joined a branch of the International 
and assisted in the establishment of a daily newspaper. 
Later he became a travelling agitator and went from town 
to town through Italy and Switzerland, preaching the gospel 
of Socialism with the ardor of a medieval religious zealot. 
Often hungry, homeless and ragged, he lived only for the 
"Cause." If he could get hold of one man in a town who 
manifested the slightest interest, Guesde rarely left him 
until he had won him over. In every town he would leave 
a small group of converts fired with something of his own 
enthusiasm. In 1876 he returned to France and immedi- 
ately took up the work of Socialist propaganda. He estab- 
lished a paper, L'Egalite, wrote for other papers, and, in 
addition to this heavy labor, rushed from one end of France 
to the other, carrying on a restless propaganda and forming 
little Students' Circles everywhere. He did not as yet 
at tempt to form a party. The time for that had not arrived. 
With rare genius and foresight he selected the promising 
young men in all the cities and awakened their personal 
interest. He was laying his foundations broad and deep. 

In 1878 a trade union congress was held at Lyons. Guesde, 
who was a delegate to the congress, had already drawn 



THE NATIONAL SOCIALIST MOVEMENTS 277 

many of the younger leaders of the unions to his side, and 
an attempt was made to get the congress to indorse the 
principles and program of Marxian Socialism. In this they 
signally failed. But in the following year the Socialist 
program was adopted by a large majority at the trade union 
congress at Marseilles. The program was written by Guesde 
and Paul Lafargue, a son-in-law of Marx. In the following 
year, 1880, the Socialist delegates to the trade union con- 
gress at Havre were in a minority and were refused admission 
by the old and conservative leaders. Excluded from the 
regular congress, the Socialists met independently in a 
separate congress. So successful were they from that point 
onward that the conservative organization ceased to exist 
after holding one other poorly-attended congress in 1881. 
The new Socialist movement in France was now fairly 
launched. 

Party dissensions: In 1882 the new party split into two 
parties. One party represented strict Marxism, and was 
headed by Guesde, Lafargue and Deville. The other party 
represented political opportunism, and was headed by Paul 
Brousse and Benoit Malon. The opportunists called the 
Marxists "Impossibilists" and themselves by contrast 
"Possibilists," and these terms are now largely used in 
Socialist controversy everywhere. In 1887 a partial recon- 
ciliation was effected, and the first Socialists were elected to 
the Chamber of Deputies. By 1891 the "Possibilists" had 
split into two groups, again over questions of tactics. There 
was still another considerable group of independent Social- 
ists led by Jean Jaures and Etienne Millerand and supported 
largely by middle-class radicals. If we add to these elements 
the semi- Anarchist Blanquists, we have five distinct elements 
in the French Socialist movement of the time. 

The united parliamentary group: In 1893 the election of 
forty Socialists to the Chamber of Deputies, by a combined 
vote of nearly half a million, led to better feeling. Largely 
through the activity of Jaures and Guesde the deputies of 
all the factions organized into a united parliamentary group, 
Jaures being chosen as its leader. No better man could 
have been selected for the position. In 1885, at the age of 
twenty-six, while Professor of Philosophy at the Ecole 
Normal Superieure, Jaur&s was first elected to parliament 



278 



ELEMENTS OF SOCIALISM 



as a radical. He was defeated in 1889 and at once returned 
to his university work. His reputation as a scholar was 
already national. In 1893 he was again elected to parlia- 
ment, this time as a Socialist. Since that time he has been 
the most striking figure in the French movement and one 
of the most striking in the political life of Europe. As an 
orator he has no peer in the parliaments of Europe. He 
is always in the forefront in parliamentary debates, is a 
tireless propagandist, and at the same time edits the leading 
Socialist daily newspaper in France, U Humanite. In addi- 
tion to all this work he manages to find time for scholastic 
work, and his collection of sources for the history of the 
French Revolution will form the basis of all future attempts 
to write the history of that period. He is also engaged in 
the preparation of a monumental history of Socialism. 

The Dreyfus case: In 1898 the cordial relations between 
the various Socialist groups were interrupted by the Dreyfus 
affair. Guesde and his followers, the "Impossibilists," 
refused to have anything to do with the matter, but Jaures 
actively espoused the cause of the accused Captain and 
conducted a brilliant parliamentary campaign which led 
to the reopening of the case and the ultimate exoneration 
of the victim. To add to the difficulty, M. Waldeck- 
Rousseau, when he became premier in 1899, made a bid for 
Socialist support by inviting Millerand to join his ministry. 
With the open support of Jaures, Millerand accepted. This 
was too much for Guesde and his followers to tolerate, 
especially since the ministry of M. Waldeck-Rousseau in- 
cluded also General de Gallifet, who in 1871 had crushed 
the Commune with almost fiendish brutality. The followers 
of Guesde and Eduard Vaillant, a veteran Socialist who had 
also been a leader in the Commune, broke with the par- 
liamentary group, and the members of the two factions 
became open enemies. 

The reunion: The breach in the French party was the 
chief matter considered at the International Congress at 
Amsterdam in 1904. Nearly all the great orators of the 
party participated in the debate, but it is chiefly remembered 
aa a great duel between Bebel, the strict Marxist, and Jaures, 
the practical Revisionist. The victory rested with Bebel 
and the congress decided in favor of the position taken by 



THE NATIONAL SOCIALIST MOVEMENTS 279 

Guesde and Vaillant. Jaures loyally submitted to the 
decision of the majority, and upon the return of the French 
delegates to France all the Socialist factions were merged 
into the ^French Section of the Workers' International 
Party," with a Marxian program and a policy of strictly 
independent political action. 

The Socialist vote: In spite of division, the Socialist 
vote has increased at every election. In 1887 it was 47,000. 
In 1893 it rose to 440,000. In 1906, the first year after the 
reunion, the vote was 877,999, and 54 deputies were elected. 
In 1910 the vote was 1,106,049, an increase of twenty per 
cent with a practically stationary population. Seventy-six 
deputies were elected, eighteen of them from the Depart- 
ment of the Seine, which includes Paris, and the remainder 
divided among 31 of the other 86 Departments of the 
Republic. The party elected two additional members in 
the Department of the Seine in 1911, making the parlia- 
mentary representation seventy-eight members. The party 
is represented in the Cantonal Councils by eighty-one 
General Councillors and sixty-three Arrondissment Coun- 
cillors, and there are about 3,800 members of the United 
Socialist Party in municipal councils. A large number of 
important cities are controlled by the Socialists. 

The large "Radical Socialist" party in France is not really 
Socialist at all, but corresponds more nearly to the "insur- 
gent" wings of the two dominant parties in the United States. 
MM. Briand and Viviani, who entered the Clemenceau 
ministry in 1907, Briand afterward becoming Premier, are 
no longer recognized as Socialists, although both were 
formerly prominent members of the party. Viviani had 
ceased to be a member of the party long before he accepted 
his portfolio in M. Clemenceau's cabinet, while Briand 
was immediately expelled by the party. 



(3) Austria 

The early movement: The first Austrian Socialist organ- 
izations formed a part of the German movement. The 
Austrians had been represented in the Eisenach Congress 
in 1869 and were active participants in the International. 



280 ELEMENTS OF SOCIALISM 

When the German Empire was formed the Austrian Social- 
ists were cut adrift from their German comrades, and the 
movement went through a long period of depression. Austria 
was slower in industrial development than Germany, and 
the difficulties of propaganda were increased by the differ- 
ences of nationality and language within the Empire. Agita- 
tion had to be carried on in seven or eight languages and 
racial and national jealousies prevented effective organiza- 
tion. Then, too, the Anarchist element was relatively strong 
and the energies of the Socialists were largely absorbed in 
the struggle against Anarchism. 

The turning point of the movement was at the Congress 
of 1888, held at Hainsfeld, near Vienna. At this congress 
the Anarchists were routed and a unified party formed with 
separate autonomous divisions. The first task of the new 
party was to work for universal and equal suffrage. Under 
the old law the electorate was divided into four classes: 
(1) The aristocracy and high clergy; (2) the great capitalists; 
(3) the middle class in cities; (4) the peasant proprietors. 
Each class was entitled to a certain proportion of the 353 
members of the Reichstag. The first victory of the Socialist 
agitation was the creation of a new electoral class or curia, 
consisting of the proletariat, entitled to elect 72 additional 
deputies. The first election under the new law was held in 
1897 and resulted in a vote of nearly 750,000 for the Social- 
ists and the election of fifteen Socialist deputies, seven of 
these coming from Bohemia. 

The later movement: The agitation for universal and 
equal suffrage continued, and fear of a revolution caused the 
government to grant, in January, 1907, equal suffrage to 
all men over the age of twenty-four. In the elections held 
under the new law the following May the Socialists polled 
1,041,948 votes and elected 87 deputies. Of these, fifty 
were Germans, twenty-four were Czechs, six were Poles, five 
were Italians and two were Ruthenians. The so-called 
"Christian Socialist Party" of Austria is a Catholic party, 
bitterly opposed to the whole Social Democratic movement. 

The best-known leader of the Austrian Social Democratic 
Party is Victor Adler, a physician who gave up his pro- 
fession to engage in Socialist journalism and politics. Adler 
is not merely one of the greatest scholars of the international 



THE NATIONAL SOCIALIST MOVEMENTS 281 

movement. He is also one of its best organizers, and as a 
parliamentary leader has few equals. Even his most bitter 
political enemies admit that Adler is the ablest leader in the 
Austrian parliament. 

(4) Belgium 

The political movement: The first definite political organ- 
ization of the Belgian proletariat was formed in 1885. Its 
primary object was to unite the workers against the capitalist 
despotism which in the " Workshop of Europe' ' is perhaps 
more absolute than anywhere else in the world. The Con- 
gress of 1885, held at Brussels, was not interested in theories, 
and although the program adopted by it was essentially 
Socialist, the word was not used and the organization took 
the name Belgian Labor Party. After eight years of agita- 
tion ending in a political strike involving 250,000 men, the 
government granted a constitutional amendment which gave 
a limited suffrage to the working class, which had heretofore 
been wholly without political power. In the first election 
held under the new law the Socialists polled 345,959 votes 
and elected twenty-nine deputies. The government replied 
by a new electoral law raising the voting age to thirty years, 
requiring a local residence of three years, establishing a more 
rigid class electoral system and giving four votes each to 
the richest class. In spite of these obstacles, the party in 
1895 obtained representation in 288 municipal councils, 
with a majority of the members in seventy-eight. In the 
partial elections for parliament in 1896 the party vote in 
the districts where elections were held was more than 
doubled, although no new seats were gained. 

The growth in voting strength since 1906 has been slow, 
but the party itself is in a much stronger position than ever 
before. With a total population of only seven millions, 
the Socialist vote in 1910 was 483,241. The party now has 
thirty-five deputies, twenty-one per cent of the total num- 
ber, and seven senators in the Belgian parliament, giving 
them second place in relative parliamentary representation 
among the Socialist parties of the world, and this in spite 
of the unequal franchise law. In addition the party has now 
850 representatives in municipal councils. 



282 ELEMENTS OF SOCIALISM 

Leaders: Belgian Socialists were very prominent in the 
International. Caesar de Paepe, a friend of Marx and an 
indefatigable agitator, was one of the moving spirits in the 
International and one of its ablest leaders. After the death 
of the International he directed his energies for many years 
to the hopeless task of bringing about harmony between the 
followers of Proudhon and Marxists like himself. Fortu- 
nately, he was able to participate in the formation of the new 
party in 1885, though he narrowly escaped being excluded 
from the congress, so weary were the delegates of the long 
years of fruitless controversy over matters of dogma and 
theory. To the congress of 1890 the old man addressed a 
letter warning the members of the party to preserve unity 
above all things, to keep the party broad enough to permit 
of the extreme radical and the opportunist working side by 
side, each in his own way. Soon after that he died in the 
south of France. Since the death of Jean Volders and 
Caesar de Paepe the foremost leaders of the party have been 
Eduard Anseele, head of the great Cooperatives, Emile 
Vandervelde, the parliamentary leader in the Chamber of 
Deputies and the party's leading theoretician, and Camille 
Huysmans, who is the permanent secretary of the Inter- 
national Socialist Bureau. 

The Cooperatives: The most distinctive feature of the 
Belgian movement is the degree to which it has developed 
cooperative production and distribution. In 1879 Anseele, 
then a printer in Ghent, founded in that city the "Vooruit," 
a workingmen's cooperative club to which was attached a 
small bakery. The movement thus begun spread rapidly, 
and extended to all the important towns of Belgium. Ghent 
now has a large club in the best part of the city with a 
department store and a cafe, all directly owned and operated 
by the members of the "Vooruit." The Maison du Peuple 
in Brussels is a magnificent building where most of the im- 
portant party congresses are now held. In addition to 
cooperative stores, bakeries and restaurants, the cooperative 
plan has been successfully extended to brewing and cigar- 
making establishments, boot and shoe factories, printing 
shops, cotton mills and dairies. In December, 1909, there 
were 174 cooperative societies with 140,730 members organ- 
ized into a national federation. The annual sales of the 



THE NATIONAL SOCIALIST MOVEMENTS 283 

cooperative distributive stores amounted to $7,846,484 with 
profits to the cooperators of $744,101. The party is largely- 
financed by its cooperative associations. 



(5) Italy 

Formation of the Italian party: The Italian sections of 
the old International, like those of Spain, were largely 
controlled by Bakunin. From the beginning, therefore, the 
Anarchists were relatively strong in Italy, and that fact 
made the progress of Marxian Socialism rather slow. In 
1878 the attempt of an Anarchist to assassinate the King 
gave the government a sufficient pretext for initiating a 
policy of repression directed equally against the Anarchists 
and the Socialists, although the latter were in no manner 
concerned in the mad act of Passanante, and had completely 
severed connections with the Anarchists in 1877. Forbidden 
to carry on an open agitation, and prevented from holding 
their national congress in 1880, and otherwise hindered, the 
various existing Socialist groups temporarily adopted a new 
line of policy. Dropping the propaganda of Socialism, they 
commenced an agitation for universal suffrage, joining forces 
with all the non-Socialist elements who were in favor of 
that reform. By 1881 this movement had grown so formid- 
able that twelve hundred societies sent delegates to a great 
national congress held at Rome, under the presidency of 
Garibaldi. The government now felt it prudent to yield 
to the demand, at least in part, and a franchise bill was 
quickly passed. Full of restrictions, the measure never- 
theless greatly extended the suffrage. 

Then the various Socialist groups once more asserted 
their real purpose and united for the campaign, as there was 
as yet no national party. Thirteen candidates were put 
forward, two of whom were elected. The thirteen Socialist 
candidates received about 50,000 votes, four per cent of the 
total vote cast. One of the two Socialists elected was Andrea 
Costa, who in his early days had been a leading Anarchist 
but had broken with Anarchism and become one of the most 
brilliant and active of the Socialists. Encouraged by the 
success of their first electoral experiment, the Italian Social- 



284 ELEMENTS OF SOCIALISM 

ists formed a national Socialist party in 1885, but it made 
little headway and led a very precarious existence. Police 
persecutions and internal dissensions reduced it to impotence. 
A fresh start was made in 1892, when the present Socialist 
Party was formed. Since that time, despite numerous 
factional quarrels, the movement in Italy has made steady 
progress. 

Different elements in the party: The new movement owed 
much of the success of its inception to the work of Philip 
Turati, an able lawyer and editor, who has continued to be 
the leader of the moderate wing of the party, the "Reform- 
ists" as they are called in Italy. Opposed to the Reformists 
are the "Syndicalists," led by Arturo Labriola and others. 
The Syndicalists lay their chief emphasis upon "direct 
action," especially the action of the labor unions. They 
regard political action as of very minor importance, not 
infrequently adopting the attitude of the Anarchists in 
repudiating it altogether as a game of compromise and deceit. 
They expect to win by means of a general strike of the 
workers rather than as a result of parliamentary action. 
Between these two factions stand the Integralists, who con- 
form in general to the accepted tactics and theories of Marxian 
Socialism. 

At the party congress of 1908, an agreement was entered 
into between the Reformists and the Integralists and this 
received the support of about two-thirds of the entire party 
membership. At the same congress the Syndicalists defi- 
nitely broke with the other factions and left the party. This 
schism, the destruction of the party organizations in Messina 
and Reggio by the earthquake of 1908, and a generally 
falling off occasioned by the considerable increase of party 
dues, led to the decrease of the party membership from 
43,000 to 30,000. In the elections of 1909, however, the 
party representation in parliament was increased from 
twenty-five members to thirty-nine and the vote rose to 
338,885. 

The movement in Italy is greatly hampered by the illiter- 
acy of a large part of the working class, and the fact that 
only seven per cent of the population enjoys the right of 
suffrage. As a result the movement is largely dominated 
by middle class "intellectuals" with relatively few working- 



THE NATIONAL SOCIALIST MOVEMENTS 285 

class leaders. Probably in no other country of the world 
has such a large proportion of scientists and literary men 
of eminence joined the party. But in Italy as elsewhere 
the voting strength comes mainly from the working class. 



(6) Great Britain 

Introductory: Although England was the first modern 
industrial country, and the home of the great Owenite and 
Chartist movements, it was relatively late in forming a 
distinctively Socialist party. The International had been 
organized in England and had exercised a great influence 
in bringing the British trade unions together and into closer 
touch with the working-class organizations of Continental 
Europe. It had been especially helpful in bringing the 
unions into the active agitation for the extension of the 
suffrage. But the International was too completely domin- 
ated by Marx and his associates ever to become recognized 
as being other than a foreign movement which the insular 
British mind regarded with a good deal of suspicion. When 
the end came the International had been completely dis- 
credited by its connection in the popular mind with the 
Paris Commune, of which such terrible stories were told. 
That the International really had very slight connection 
with the Commune was not then generally known. For 
many years after its decline and fall the unions were left 
suspicious of Socialism, and the movement was confined 
to a few foreigners, mostly Germans, in London. 

Rise of social democracy: After the extension of the 
franchise in 1867 it became increasingly evident that the 
mere possession of political power did not of itself suffice to 
cure the social ills which all deplored, and by 1880 all sec- 
tions of radical thought in England were ripe for Socialist 
agitation and organization and propaganda. The Irish Land 
League had won an immense amount of popular support, 
which was increased by the opposition of Mr. Gladstone's 
ministry in 1880, the first year of his second term as Prime 
Minister. Gladstone's Egyptian policy still further in- 
tensified the breach between the radical elements of Great 
Britain and the Liberal Party. Then came the influence 



286 ELEMENTS OF SOCIALISM 

of Henry George, whose book, Progress and Poverty, had an 
enormous circulation in all parts of Great Britain and 
Ireland. Believers in George's theories formed little local 
groups and in many cases went much farther than George 
and became thorough-going Socialists. 

The time was ripe, therefore, for the formation of a 
definite Socialist body when, in March, 1881, the Democratic 
Federation was formed. The moving spirit of the new 
organization was Mr. Henry M. Hyndman, a graduate of 
Trinity College, Cambridge, a brilliant scholar and journal- 
ist, and a friend of the great Italian revolutionist, Mazzini. 
Since that time Mr. Hyndman has been the acknowledged 
leader of Marxian Socialism in England. It is worthy of 
note that at the organization meeting of the Democratic 
Federation the presiding officer was the man who presided 
at the foundation of the old International, Professor E. S. 
Beesly. To all the delegates assembled, Mr. Hyndman 
presented copies of his little book, England for All, the first 
attempt to popularize Marxian theories in English. The 
Democratic Federation was from the first essentially a 
Socialist body, though the only specifically Socialist proposal 
in its program was the "nationalization of the land," which 
was placed ninth on the list of specific reforms. This was 
not borrowed from Henry George as is commonly supposed. 
It had long been one of the proposals of English democratic 
leaders and movements. Bronterre O'Brien, greatest of the 
Chartist leaders, and the first to call himself a Social Demo- 
crat, was a vigorous advocate of land nationalization. The 
idea was promulgated long before O'Brien even by Thomas 
Spence, as far back as 1775. In 1883 the name of the 
organization was changed to Social Democratic Federation, 
and a more definitely Socialist program was adopted. 
Among the early members of the Federation were William 
Morris, the great artist and poet; Herbert Burrows, a well- 
known theosophist; E. Belfort Bax, historian and phi- 
losopher; Helen Taylor, step-daughter of John Stuart Mill; 
Annie Besant, the most famous woman orator in England; 
Edward Aveling, a brilliant and versatile scholar, and his 
wife, Eleanor, youngest daughter of Karl Marx; Edward 
Carpenter, author and educator; John Burns and Tom Mann, 
two of the most effective of English trade union leaders. 



THE NATIONAL SOCIALIST MOVEMENTS 287 

In December, 1884, Morris, Bax, the Avelings and a 
number of others withdrew from the Social Democratic 
Federation and founded the Socialist League. The grounds 
of the secession were mainly personal, though it developed 
into an important difference of viewpoint. Morris and his 
followers relied upon educational propaganda mainly and 
ignored political action, while the Federation under the 
leadership of Mr. Hyndman was from the very first pledged 
to the task of developing a Socialist political party. The 
Federation organ, Justice, and the League organ, The 
Commonweal, indulged in bitter controversies. Quite 
naturally, the anti-parliamentary attitude of the Socialist 
League attracted the Anarchists to it, and Morris and the 
others who had seceded from the Federation soon resigned 
from the League. All of them except Morris returned to the 
older organization, Morris himself acknowledging that in the 
original controversy Mr. Hyndman had been right. While 
he did not rejoin the Federation, Morris contributed to its 
funds, spoke at its meetings and supported the parliamentary 
candidature of Mr. Hyndman. 

The growth of the Federation was very slow. It was 
regarded with distrust by Frederick Engels and his imme- 
diate associates, so that it did not include in its membership 
all the avowed Marxists living in England. On the other 
hand, it was too Marxian in the theoretical and dogmatic 
sense to make a successful appeal to the British working 
classes. The Federation did not understand the trade union 
movement, notwithstanding the successful work among the 
unions of men like Mann and Burns. The Federation tried 
to act as the schoolmaster of the unions, and when its policy 
was not adopted frequently attacked the union leaders. 
In addition to this antagonism of the organized workers the 
Federation frequently antagonized the religious elements 
among the working class, especially the non-conformists, 
through the outspoken attack of some of its leaders upon 
Christianity. 

The Independent Labor Party: But the vigorous propa- 
ganda carried on by the Social Democratic Federation was 
not barren of results. It laid the foundations for a new 
movement. In January, 1893, a conference was held at 
Bradford in fulfillment of an understanding arrived at 



288 ELEMENTS OF SOCIALISM 

during the Trade Union Congress of the previous autumn. 
The moving spirit in the organization of the conference was 
Mr. J. Keir Hardie, a Scotch miner and labor leader who 
since 1887 had been publishing a labor paper, and had 
recently been elected to Parliament. At this conference 
the Independent Labor Party was formed. It was from 
the first frankly Socialist in aim, although its Socialism 
was crude and based upon an instinctive sense of justice 
rather than upon a basis of well-reasoned theory. The 
new party grew rapidly, attracting many discontented mem- 
bers of the Liberal Party, a large number of trade unionists 
and a great many men and women members of the non- 
conformist religious bodies who had been repelled by the 
Federation. Many of its propagandists were lay preachers 
in the Methodist and other non-conformist churches, and 
they brought to the propaganda of Socialism a religious 
fervor and spiritual point of view which proved very effec- 
tive. It was quite common at one time for meetings of the 
party to be held in churches and opened with singing and 
prayer. Frederick Engels gave the new party his blessing 
and joined it, though he never took any part in its propa- 
ganda. Concerning the labor movement which found its 
effective expression in the Independent Labor Party, Engels 
wrote in 1892: "It moves now and then with an over- 
cautious mistrust of the name of Socialism, while it gradually 
absorbs the substance/ ' Engels on various occasions wrote 
sneeringly of the sectarianism and dogmatism of the Social 
Democratic Federation. In 1895 the Independent Labor 
Party participated in the general elections, but fared rather 
badly, even Keir Hardie losing his seat at South-West Ham. 
The labor representation committee : At the Trade Union 
Congress of 189ft a committee was organized for the purpose 
of bringing together the trade unions, Socialist organizations 
and cooperative societies in a common effort to gain repre- 
sentation in Parliament. This action was a natural develop- 
ment out of the long-felt need for the unity of the working 
clnss movement, but it was undoubtedly hastened by the 
decision of the courts in the famous Taff Vale Railway Case, 
which compelled the railway workers' union to pay the Taff 
Vale Railway Company about $115,000 damages for the 
loss sustained by the company as a result of a strike organ- 



THE NATIONAL SOCIALIST MOVEMENTS 289 

ized by the union. This decision strongly emphasized the 
need for united and independent political action. 

Except for a few Scottish societies, the cooperative 
societies did not take up the new movement with enthusiasm, 
but the Independent Labor Party, the Social Democratic 
Federation and the Fabian Society joined it, and the trade 
unions came in very rapidly. The Social Democratic Federa- 
tion soon withdrew when it failed to persuade the committee 
to adopt a definitely Socialist program. 

The parliamentary election of 1900 was suddenly sprung 
upon the country in the midst of the Boer War and the 
Labor Representation Committee was not well prepared 
either with money or suitable candidates, but the average 
labor vote increased from 1,500 to 4,000, and Richard Bell, 
leader of the railway workers' union, and Keir Hardie 
were elected. The first real test of the strength of this 
coalition came in 1906 when the Committee ran fifty can- 
didates for Parliament, of whom thirty were elected. 

The Labor Party: In 1906 the name of the organization 
was changed to the Labor Party. This involved no other 
material change, and the Labor Party is, therefore, not so 
much a distinct and separate party as a union of various 
working class elements for political campaign purposes in 
which there are both Socialist and non-Socialist elements. 
The Independent Labor Party retains its own autonomous 
organization, and its own Socialist platform. While the 
Labor Party adopts the nominees of the Independent Labor 
Party, it also puts forward candidates who are not by any 
means Socialists, some of them being Liberals of the old 
school, quite opposed to Socialism. This arrangement makes 
it very difficult for the outsider to understand British 
Socialism. 

One of the chief problems of British Socialism arises out 
of this alliance with the trade unions in the Labor Party. 
So long as the nominees of the Labor Party are Socialists, 
or even men who are regarded as being quite near to Social- 
ism, it is comparatively easy to get the rank and file of the 
Socialists to support them. When, however, trade union 
leaders of the old type, generally Liberals and opposed to 
Socialism, are nominated, a great deal of dissatisfaction is 
expressed by the Socialist rank and file. The difference has 



290 ELEMENTS OF SOCIALISM 

frequently manifested itself in Parliament, the Labor Party 
men voting differently according to their political persuasion. 
This latter fact has done much to weaken confidence in the 
permanence of the Labor Party. The Social Democratic 
Party — the word Federation was changed to Party in 1907 — 
is not affiliated with the Labor Party. Many of its promi- 
nent members are affiliated with it, however, through their 
respective trade unions, and one of the most prominent 
representatives of the Labor Party in the House of Commons, 
William Thorne, has for many years been one of the leaders 
of the Social Democratic Party. ~ In some cases branches of 
the Social Democratic Party have joined the Labor Party. 

In the elections of January, 1910, the Labor and Socialist 
parties put forward seventy-eight candidates, of whom forty 
were elected. In the seventy-eight constituencies in which 
candidates were put forward the total Labor and Socialist 
vote was 505,690. In the elections of the following December 
the number of candidates put forward by the Labor and 
Socialist parties was fifty-six, of whom forty-two were 
elected. Of these, eight were elected directly by the Inde- 
pendent Labor Party, acting alone and without alliance with 
the Labor Party. Fifteen other members of the Independent 
Labor Party were elected as nominees of the Labor Party. 
One member of the Social Democratic Party was elected 
by the Labor Party, making a total of twenty-four avowed 
Socialists. Four of these belonged also to the Fabian Society. 
In local elections the various Socialist bodies and the trades 
unions frequently unite. The report of the International 
Socialist Bureau to the Copenhagen Congress, in 1910, gave 
the number of Socialist representatives upon local governing 
bodies at that time as 1,126. 

The Fabian Society: An important and peculiar feature 
of the Socialist movement in Great Britain is the Fabian 
Society, an organization formed in 1884 by a brilliant group 
of middle-class men and women for the purpose of permeating 
other organizations with Socialist ideas. It was not intended 
to be, and never has been, a political party. Many of its 
members are Liberals and in the elections of 1910 of the 
eight members of the Fabian Society elected to Parliament 
four were elected as Liberals. Among the early members of 
the society were George Bernard Shaw, then a struggling 



THE NATIONAL SOCIALIST MOVEMENTS 291 

young author, little known outside of a small circle of 
radicals; Sidney Webb, economist and author; Beatrice 
Potter, who had been secretary to Herbert Spencer, and who 
later became Mrs. Sidney Webb; Mrs. Annie Besant; 
Hubert Bland, a radical journalist, and Sidney Olivier, now 
Governor of Jamaica. 

The society has never tried to attract a large membership. 
Its greatest contribution to the Socialist movement has been 
in the educational field. The remarkable series of Fabian 
Essays, and, later, the Fabian Tracts, have been of immense 
service to the movement. The latter may be divided into 
three principal groups. The first group consists of small 
pamphlets which deal with Socialism in general, popular 
expositions from different points of view. The second group 
consists of popular studies, written by experts, dealing with 
the relation of Socialism to special problems, such as the 
liquor problem, poverty and old age, and so on. The third 
group consists of popular expositions of the laws as they 
relate to special subjects, such as public health, for example, 
and statements of what may be done and how it must be 
done. These "tracts" are sold by the thousand at a penny 
each and have done an immense amount of good in educating 
the working class leaders and fitting them to do efficient 
service upon public bodies. 

The Fabian Society is not a Marxian organization. It 
does not accept Marx's theories. Long before the rise of 
the Revisionist movement in Germany, the Fabians were 
Revisionists, and it is probable that Bernstein, who resided 
in London during many years and came into close associa- 
tion with the Fabians, was largely influenced by the Fabian 
point of view. The most important political work of the 
Fabian Society has been in connection with the administra- 
tion of the London County Council. In 1910 the Society 
for the first time in its history put forward two parlia- 
mentary candidates, neither of whom was elected, however. 

The movement for Socialist unity: For some years past 
there has been a constant agitation for the union of the 
Socialist forces of Great Britain, and prominent Socialists 
like Walter Crane, the artist, who is a member of the Social 
Democratic Party, have done much to promote the move- 
ment for Socialist unity. When the Independent Labor 



292 ELEMENTS OF SOCIALISM 

Party was young and struggling the Social Democratic 
Federation regarded it rather contemptuously, meeting all 
advances of the Independent Labor Party with the declara- 
tion that its attitude toward that body was one of "benev- 
olent neutrality." But as the new party grew and developed 
self-sufficiency, producing a literature of its own, and drawing 
by far the largest number of workers to its ranks, the desire 
for union with the older organization was less acutely felt. 
At the end of 1911, the Social Democratic Party joined with 
several small local Socialist bodies, and a few branches of the 
Independent Labor Party, adopting the name, British Social- 
ist Party. The new party is little more than the Social 
Democratic Party under another name. 

(7) The United States 

The Utopian period: The free land and the political 
democracy of America led to its choice as the field for nearly 
all the great Utopian experiments. Altogether over four 
hundred such colonies were established in the United States, 
most of them in the period from 1825 to 1850. The movement 
was essentially exotic, although in Albert Brisbane, America 
produced one of the ablest propagandists of Fourierism, 
and the New York Tribune under Horace Greeley gave a 
great deal of support to the movement. The famous Brook 
Farm experiment, notwithstanding the support of such 
intellectual celebrities as Emerson, Ripley, Hawthorne, the 
Channings, Thoreau and Margaret Fuller, was without any 
great social significance. The movement as a whole was 
never in any sense a political movement. Many of the 
members of the Fourierist phalanxes belonged to the Free 
Soil Party, and three of the members of the Wisconsin 
phalanx represented that party in the State Senate, but 
there was no affiliation of the movement as such to any 
political party. 

The Utopian movement inevitably had an effect upon the 
later Socialist movement. In the first place, many of those 
who came into the movement in the late sixties and early 
seventies of the last century had been connected more or 
less directly with the various Utopian experiments, and 
brought some of their Utopianism into the new movement. 
Far more important than this fact, however, was the fact 



THE NATIONAL SOCIALIST MOVEMENTS 293 

that the Utopian experiments had been so universally 
regarded as examples of Socialism in practice that it took 
an unusually long time to make the American people regard 
it as a political movement having nothing in common with 
Communism in general and sex-communism in particular. 
Fostered by Bellamy's Looking Backward, Utopian ideas 
were uppermost in the minds of many American Socialists 
as lately as 1897, when the newly organized "Social Democ- 
racy of America" seriously contemplated the colonization 
of one of the Western States, and the establishment there 
of a cooperative commonwealth. 

The German period: The reasons which led to the selec- 
t on of the United States as the country in which to make 
the greatest experiments with Fourierism, Owenism and 
similar Utopian movements operated to bring hither many 
of the European revolutionists who, finding it necessary to 
leave Europe, found the democratic institutions of America 
and the inducement of very cheap land attractive. Thus 
the newer Socialism appeared in the United States almost 
as early as in Europe itself. Weitling, whom we have con- 
sidered as linking the Utopian and Marxian movements, 
came to the United States in 1846 and started the Volks- 
tribun, a weekly newspaper for the advocacy of Socialism. 
The revolutionary agitation in Europe soon called him back, 
however, and he participated in the uprisings of 1848, 
returning almost immediately to the United States. In 1850 
he established another paper, Die Republik der Arbeiter, 
and in October of the same year organized a national con- 
vention, which met at Philadelphia. Forty-two organiza- 
tions of German workingmen were represented at the con- 
vention, their aggregate membership being about 4,400. 
Many of these members were exiles who had fled from 
Germany after the failure of the Revolution of 1848. The 
subjects discussed at the convention included labor exchange 
banks, political party organization, education, propaganda, 
and the general subject of communist colonies, a program 
which reflects the curious mixture of old and new ideas then 
prevailing. 

' For the next twenty-five years Socialist discussion was 
confined almost entirely to German immigrants. The 
German athletic associations, the Turnvereine, were always 



294 ELEMENTS OF SOCIALISM 

centres of Socialist activity, and the German trade unions 
generally favored Socialism and independent working class 
action. In 1868 the Social Party of New York and Vicinity 
conducted a campaign upon a platform resembling that of 
the International in many respects, and polled a very insig- 
nificant vote. The more active and aggressive members of 
this party formed, immediately after the election, the 
General German Workingmen's Association, which in Feb- 
ruary, 1869, became a section of the International, known 
as Section One of New York. Other sections were rapidly 
organized, and by 1872 Marx realized that his main strength 
was not in Europe, but in North America, hence the decision 
to remove the headquarters of the International to New York. 

The Socialist Labor Party: Following the crisis of 1873, 
and the consequent business depression, small Socialist 
parties were formed in New York, Chicago, and Cincinnati, 
chiefly among German workingmen, and in 1876, one week 
after the disbanding of the International, representatives of 
these parties met in Philadelphia and organized the Working- 
men's Party of the United States, with a Marxist program. 
In 1877 the party name was changed to Socialist Labor 
Party of North America. 

The movement was still a transplanted German party. 
Its members were not familiar with American conditions. 
Consequently, the party failed to gain a foothold in the 
American trade unions or to attract any permanent American 
followers in its political campaigns. The American mind 
did not readily grasp the abstract theoretical points which 
the Germans were fond of discussing, and the Germans 
neither understood nor cared about the special political 
problems which were uppermost in the American mind. 
The radical elements in the United States were too much 
absorbed in the Greenback, Single Tax and Populist move- 
ments to listen to discussions of surplus-value and the 
materialistic conception of history. 

In 1880, after the Greenback Party had come into closer 
touch with the labor movement, the Socialist Labor Party 
decided to support the Greenback candidates. Immediately 
after the presidential election the alliance was dissolved, 
the Socialists being profoundly dissatisfied with the tactics 
of their Greenback allies. The only other alliance with non- 



THE NATIONAL SOCIALIST MOVEMENTS 295 

Socialists ever made by the Socialist Labor Party, if we 
except a few isolated local instances, was in 1886 when the 
party joined with the United Labor Party in the nomina- 
tion of Henry George for mayor of New York. 

Conflict with the Anarchists : The energies of the Socialist 
Labor Party for the first ten years of its existence were 
largely devoted to a struggle with the growing Anarchist 
movement, which was likewise transplanted from Europe. 
The Anarchists found a leader in John Most, an expelled 
member of the German Social Democracy, who came to 
the United States in 1882 after serving sixteen months in 
an English prison. Most started a vigorous Anarchist cam- 
paign, and found it easy to persuade many of the discouraged 
German workingmen that political action was hopeless in 
America. He made many converts among the Socialists 
and two of the party papers went over to the Anarchists. 
The party was so weakened that all except two of the party 
* papers were forced to suspend publication. By 1884, how- 
ever, the party had begun to recover its lost strength and in 
the next two years doubled the number of its local organiza- 
tions. Then came the riot in Chicago and the execution of 
the Anarchist leaders, an event which Socialists in common 
with many non-Socialists have always regarded as judicial 
murder. Anarchism in the United States never recovered 
from that catastrophe, and the field was thereafter relatively 
free for Socialist propaganda and growth. In 1892 the 
Socialist Labor Party nominated Simon Wing for president 
of the United States and Charles H. Matchett for vice- 
president, the ticket polling 21,512 votes in six States. In 
1896 the vote increased to 36,275, and in the Congressional 
elections of 1898 the Socialist Labor Party reached its 
maximum voting strength with 82,204 votes. 

The Socialist Labor Party and the trade unions : Beginning 
in 1881 the Socialists for several years made desperate efforts 
to obtain control of the Knights of Labor, but without 
success. When the American Federation of Labor was 
formed in 1886 the capture of that organization was similarly 
attempted. The theory of the Socialist Labor Party was 
that the trade union represented a less developed form of 
class consciousness than the political organization. That 
the workers were organized into unions was a good thing, 



296 ELEMENTS OF SOCIALISM 

a sign that they were in some degree class conscious, but 
they needed to be taught the necessary shortcomings of 
trade unionism, the insufficiency of their aims, and the 
superiority of the Socialist method of political action. They 
attempted to get the unions to endorse the candidates of 
the Socialist Labor Party and even to make acceptance of 
Socialist principles a condition of membership. Naturally, 
the leaders of the unions, who were aiming to unite all 
workers, regardless of party or creed, vigorously opposed 
these attempts, with the result that bitter hostility developed 
between the two wings of the working class movement. 
Matters reached a climax when, in 1896, under the leader- 
ship of Daniel De Leon, the Socialist Labor Party started a 
rival organization to the American Federation of Labor, 
called the Socialist Trade and Labor Alliance. This body 
by its bitter opposition to the trade union movement made 
it practically impossible for a responsible union member 
to become a Socialist, and developed in the minds of the 
active trade unionists a contempt for Socialism which has 
not yet wholly disappeared. After a brief existence, during 
which time it demonstrated the folly of attempting to base 
trade unionism upon political beliefs and affiliations, the 
Socialist Trade and Labor Alliance died. 

The majority of the members of the Socialist Labor Party 
was never in favor of these tactics. Those who opposed 
them, however, were suppressed and expelled. Whole sec- 
tions were either suspended for long periods or expelled by 
a highly centralized executive. Lucien Sanial aptly char- 
acterized this period as "a burlesque Reign of Terror/ ' 
Many of the foremost leaders in the Socialist Party of to-day 
were expelled from the Socialist Labor Party for opposing 
its policy toward the unions — some of them being ex- 
pelled after they had voluntarily resigned in despair or 
disgust. 

Then came revolt. In New York the opposition to De 
Leon grew and he and his supporters were ousted from office 
and their successors elected. But De Leon and his associates 
refused to submit to the majority and a split occurred. 
There were now two parties, each claiming to be the Socialist 
Labor Party, each having an official organ called The People, 
and each spending most of its time denouncing the other. 



THE NATIONAL SOCIALIST MOVEMENTS 297 

Never at any time has the Socialist movement been dragged 
so low as it was in the United States during this period. 

Formation of the Socialist Party : In the meantime a new 
movement had started in the West. It was at first inclined 
toward Utopianism and the colonization of some Western 
States was seriously advocated. In 1898 a large part of the 
membership abandoned this idea and, under the leadership 
of Eugene V. Debs and Victor L. Berger, organized the Social 
Democratic Party of America. The party grew rapidly 
and in 1899 elected two members to the Massachusetts 
Legislature, the mayors of Haverhill and Brockton in that 
State, and a number of local officials in Wisconsin. 

Both the factions which claimed to be the Socialist Labor 
Party nominated candidates at the presidential election in 
1900, but the anti-De Leon faction at once made overtures 
to the Social Democratic Party, looking to the union of the 
two bodies. A joint committee decided upon terms of union 
and the nomination of Eugene V. Debs of the Social Demo- 
cratic Party for president and Job Harriman of the Socialist 
Labor Party for vice-president. This agreement was rejected 
by the members of the former party by a narrow margin, 
and an embarrassing situation was the result. However, a 
temporary agreement was made and both bodies supported 
the candidature of Debs and Harriman, the De Leon wing 
of the Socialist Labor Party nominating Joseph F. Malloney 
and Val. Remmel. The vote for Debs and Harriman was 
97,730, more than the Socialist Labor Party had ever polled. 
The vote of the Socialist Labor Party fell to 39,739. In 1901 
the elements which had united in nominating Debs and 
Harriman held a unity convention and established the 
present Socialist Party. 

Recent developments: The Socialist party more than 
doubled its membership in the first three years of its existence, 
and in 1904 it polled 402,321 votes. The vote was undoubt- 
edly much larger than the real voting strength of the party, 
a great many Democratic voters having voted the Socialist 
ticket merely as a protest against the selection of a con- 
servative candidate by their own party. The membership 
of the party again more than doubled from 1904 to 1908, 
and the party vote of 424,483 in the latter year was a more 
reliable measure of its dependable voting strength. The 



298 ELEMENTS OF SOCIALISM 

vote of the Socialist Labor Party in the same year fell to 
13,825. In 1910 the Socialist Party elected thirty mayors, 
the most important of these being the mayor of Milwaukee, 
in which city the Socialists elected a majority of the city 
council. The vote in the Congressional elections rose to 
604,756 and Victor L. Berger was elected to the House of 
Representatives, being the first Socialist to enter Congress. 
The party also succeeded in electing twelve representatives 
and two senators to the Wisconsin State Legislature, and 
one representative each in Massachusetts, Pennsylvania, 
Minnesota and North Dakota. The party membership 
increased from 41,000 in 1908 to 110,000 at the end of 1911, 
a gain which is in many respects more significant than the 
increased vote. 1 

Party organization: The unit of organization in the Social- 
ist Party is the "Local," composed of five or more dues- 
paying members. Once a local has been formed membership 
in the party is obtained only by vote of its members and the 
applicant must sign a pledge declaring acceptance of the 
party's program and principles and the fact s that the appli- 
cant has severed all connections with other political parties. 
The locals are united into State organizations, which are in 
turn united into a national organization. The affairs of the 
national party are administered by a national committee, 
composed of State representatives elected by the members 
in the various states, and a national executive committee. 
All the acts of these committees are subject to party refer- 
endum upon the demand of a small percentage of the 
members. 

The financial support of the party is derived from the 
monthly "dues" of its members, supplemented by voluntary 
contributions. The monthly membership fee differs in 
various parts of the country, but twenty-five cents per 
month is the usual fee. This is automatically divided among 
the national, state, and local organizations by means of a 
system of dues stamps. These are issued by the national 
executive committee and sold to the state committees, the 
amount so derived maintaining the national organization. 

1 In the local elections of November, 1911, a number of Socialist 
mayors were elected and Socialist representatives chosen in New York 
and Rhode Island. 



THE NATIONAL SOCIALIST MOVEMENTS 299 

The stamps are then sold by the state committees to the 
local organizations at a profit, and by the local organiza- 
tions to the members are a further profit. The national 
state and local organizations are thus each assured of 
financial support. 

The Socialist Party and the trade unions: As we have 
seen, before the rise of the present Socialist Party the trade 
union movement had been largely alienated from the Social- 
ist movement as a result of the tactics adopted by the Social- 
ist Labor Party. The attitude of the Socialist Party toward 
the unions was clearly defined by the national convention 
of the party in 1908, and again in 1910 at the special con- 
gress of the party: 

"The Socialist Party does not seek to dictate to organized 
labor in matters of internal organization and union policy. 
It recognizes the necessary autonomy of the union movement 
on the economic field, as it insists on maintaining its own 
autonomy on the political field. It is confident that in the 
school of experience organized labor will as rapidly as 
possible develop the most effective forms of organization 
and methods of action. ... It finds reason to hope for 
closer solidarity on the economic field and for more effective 
cooperation between organized labor and the Socialist Party, 
the two wings of the movement for working class eman- 
cipation." 1 

The adoption of this policy, and the consequent abandon- 
ment of attempts to "capture" the American Federation of 
Labor, have resulted in bringing about a much better under- 
standing between the party and the trade unions. But the 
Socialist Party in the United States, like most of the Euro- 
pean parties, has its right and left wings, its "Revolutionists" 
on the one hand and its "Opportunists" on the other. The 
former element tends toward Syndicalism, and to the advo- 
cacy of the general strike as a better method of class warfare 
than political action. The conflict between these two 
elements of the party is largely centred upon the question 
of the relation of the party to the trade unions. The domi- 
nant majority, following the tactics of Marx and the 
German Social Democrats, seeks to obtain the friendship 

1 Proceedings National Convention Socialist Party, 1908, p. 95; Pro- 
ceedings National Congress, 1910, pp. 277-289. 



300 ELEMENTS OF SOCIALISM 

and cooperation of the American Federation of Labor and 
its affiliated unions. The "revolutionary minority/ ' on the 
other hand, refuses to recognize the trade unions as forming 
an equal part of the general movement of the working class, 
the "other arm" of the fighting proletariat, and demands 
that the party shall do its best to force the unions to give 
up their present policies and change their form of organiza- 
tion. The outcome of this controversy cannot at this time 
be predicted. 

The movement among women: The Socialist Party has 
always admitted women to membership upon equal terms 
with men, and many women hold prominent positions in the 
party. At the convention of 1908 a National Women's 
Committee was established by the party to take charge of 
the special propaganda work among women. 

Press, literature and education: The party press is not 
owned directly by the party, as in Germany and some other 
countries. The fear of placing too much power in the hands 
of an official body has operated thus far to cause the defeat 
of all propositions looking to the establishment of party- 
owned papers. There are about two hundred Socialist 
papers and magazines, a majority of them owned by cooper- 
ative associations of Socialist party members, a few by State 
and local organizations, the others by individuals. 

The literature of the movement has shown an enormous 
improvement during the ten years of the party's existence, 
and in extent and importance takes rank with the literature 
of almost any other country with the exception of Germany. 
The works of American Socialist writers are translated into 
other languages and widely read. 

The party carries on an almost incredible amount of 
educational work by means of travelling lecturers and the 
distribution of millions of pamphlets and books each year. 
"Study Courses' ' are furnished to the local organizations 
and in this way thousands of members are induced to make 
a systematic study of Socialist theory. 

Allied Socialist organizations: Closely allied to the So- 
cialist Party, though not directly affiliated with it, are the 
Young People's Socialist Leagues and the Socialist Sunday- 
schools. The former are organizations of young people 
between the ages of fifteen and twenty. They combine 



THE NATIONAL SOCIALIST MOVEMENTS 301 

recreation and social features with the study of Socialism 
by.means of debates, lectures and reading. In general they 
are patterned after the German organizations of young people 
and are favored by the party. On the other hand, the Sunday- 
schools, for young children, are regarded with some sus- 
picion. As Mr. Hillquit said at the 1910 Congress, "The 
mind of the child is too sacred to be made the object of 
rough experiments, and Socialist Sunday-schools conducted 
with insufficient skill or method often do more harm than 
good." 1 The Sunday-schools are generally carried on by 
individuals or local committees. The party as a whole has 
never approved them. 

Among the larger schools conducted in the interest of the 
Socialist movement, the Rand School of Social Science in 
New York City is the most efficient and the most important. 
The Intercollegiate Socialist Society is a society for the 
promotion of an intelligent study of Socialism. It is not, 
therefore, committed to the advocacy of Socialism. Promi- 
nent non-Socialists have always been closely identified with 
it. At the end of 1911 the society had "study chapters" in 
thirty-eight American colleges and universities. 



(8) Russia 

Difficulties: The Socialist movement in Russia is carried 
on under difficulties such as the Socialists of no other country 
have had to face. The heroism of the men and women who 
have built up a great movement under the cruellest despot- 
ism of modern times has been rarely equalled and never 
surpassed. From the general restrictions forbidding meet- 
ings and the circulation of Socialist literature to the summary 
execution and arbitrary imprisonment or exile of active 
participants in the movement, every device that tyranny 
could invent has been used to check and crush the Socialist 
movement. 

Beginning of the movement : The first approach to modern 
Socialist thought appears in connection with the agitation 
for the emancipation of the serfs, especially in the writings 
of Alexander Herzen and Nicholas Chernyschefsky. Herzen 

1 Proceedings National Congress, 1910, p. 68. 



302 ELEMENTS OF SOCIALISM 

was an expatriated nobleman of wealth who published in 
London a magazine called Kolokol (Bell). He died in Geneva 
in 1869. Chernyschefsky was the editor of an influential 
magazine who spent many years in Siberian exile and re- 
turned to Russia an old man, physically and mentally 
wrecked. From 1860 to 1870 Nihilism flourished in Russia. 
The word "Nihilism" was first used by a famous Russian 
novelist to ridicule the new school of thought with its crude 
materialism and negation of all established beliefs. Nihilism 
served the Socialist movement in one important respect. 
It was wholly an intellectual force, and was not at all con- 
nected with the Socialist movement, but it caused a great 
many of the younger men and women of Russia to call the 
existing order into question and fostered a thirst for positive 
knowledge. 

This longing for positive knowledge sent a large number 
of students of both sexes forth to Switzerland and other 
countries to study in the great universities. There they fell 
under the influence of the teaching of such men as Herzen, 
Bakunin and Peter Lavroff — the latter a disciple of Marx. 
The government became alarmed at the prospect of having 
its young men and women made Socialists, and in 1873 
ordered all the students to return at once to Russia under 
pain of exile. Many of the students refused to obey the 
order, but most of them did, and in a little while the Russian 
government found that it had to contend with a large num- 
ber of active Socialist propagandists. During the five years, 
1873-78, these propagandists were busy carrying on the 
twofold work of general education and Socialist propaganda, 
especially among the peasants. The government answered 
with relentless persecution, and the Socialist propagandists 
were executed, imprisoned or exiled to Siberia, frequently 
without trial. By 1878 the young movement was checked 
and its propaganda was abandoned. 

The rise of terrorism: In that year General Trepoff, the 
military commandant of St. Petersburg, who had been par- 
ticularly brutal and inhuman, was shot by a young woman, 
Vera Sassulich, as an act of revenge for his brutal treatment 
of a political prisoner. Arrested and tried by jury for the 
offense, the young woman was acquitted. Encouraged by 
this outcome of the trial, and forbidden to use the methods 



THE NATIONAL SOCIALIST MOVEMENTS 303 

of peaceful propaganda, the more daring of the Socialists 
decided to copy the example of Vera Sassulich and institute 
a reign of terrorism. A small handful of idealists, they 
dared challenge the power of Russian autocracy with all 
its police and soldiers. For three years they carried on a 
most remarkable movement of terrorism, culminating in the 
assassination of Alexander II, in March, 1881, by Sophia 
Perovskaia and her associates. This brought the first pe- 
riod of terrorism to an end. The revolutionists had hoped 
that the killing of the Czar would be the signal for a general 
uprising, but they were disappointed. Russia was not ready 
for such an uprising, and within a short time the revolution- 
ary organization was dead. 

Social democracy and organized labor: In the early 
nineties, as a natural result of economic development, labor 
unions appeared in the growing industrial centres. This new 
movement of organized labor fulfilled in a measure the hopes 
of a small group of men and women, Marxian Socialists, who 
had declared during the terroristic period that the Socialist 
movement would never become a real force until the eco- 
nomic development of the country made the organization 
of labor unions necessary. Meantime, they carried on the 
work of laying the foundations for a political party. When 
the labor unions appeared in considerable numbers an 
impetus was given to this political movement, and the Social 
Democratic Party soon had local committees in many 
Russian cities, and the movement was further strengthened 
by the organization of Jewish, Polish, Lettish and Armenian 
Social Democrats. By the year 1900 the Social Democratic 
Party, despite the fact that it was compelled to work in 
secret, and was ruthlessly persecuted, had developed con- 
siderable power. It was this party which led the revolu- 
tionary outbreak at the end of 1905. 

Revival of terrorism: But the revival of the Socialist 
movement brought with it the revival of terrorism on the 
part of some of the revolutionists. Various groups of revolu- 
tionists who relied upon terrorism as the most effective weapon 
with which to meet the cruel and repressive autocracy 
appeared in various parts of the country, and in 1901 united 
into the party of Socialist Revolutionists. It is this party 
which has carried on the campaign of terrorism in recent 



304 ELEMENTS OF SOCIALISM 

years, and most of the political assassinations are attributed 
to it. 

Strength of the movement: It is impossible to measure 
the strength or the growth of Socialism in Russia, owing to 
the fact that only secret methods of agitation and organiza- 
tion are possible. The various Socialist parties have par- 
ticipated in all the Duma elections since the promulgation 
of the Constitution of 1905. To the First Duma, in 1906, 
several members of the Social Democratic Party and the 
Socialist Revolutionists were elected, despite the fact that 
the two parties had officially declared a boycott of the 
election and urged their members not to participate in it. 
Including with these the peasant Socialists and the labor 
union representatives there were over one hundred members 
in the labor group of the First Duma. 

In the Second Duma elections, in 1907, the Socialist 
parties decided to participate, in spite of the bitter persecu- 
tion which had been directed by the government against the 
working class members of the first Duma. Of the 440 
members of the Second Duma no less than 132 were elected 
by the Socialists. Practically all of these representatives 
of the Socialist movement were later imprisoned or exiled. 
This Duma, like the first, lasted only a short time, when it 
was dissolved by the authorities. 

A new and glaringly undemocratic constitution was 
promulgated for the Third Duma. The electorate was 
divided into five curiae, giving one representative to every 
230 of the landed nobility, one for every 1,000 of the greater 
capitalists, one for every 15,000 of the smaller capitalists 
and tradesmen, one for every 60,000 of the peasant class, 
and one for every 125,000 of the artisan class. Furthermore, 
in the case of the peasants and artisans the elections were 
made indirect. The Socialist Revolutionists under the cir- 
cumstances not only declined to participate in the elections, 
but waged a bitter campaign against them. The Social 
Democrats, on the other hand, decided to participate in the 
elections, despite everything. They elected nineteen mem- 
bers out of a total of 427. 

These figures are only available as indicating the tre- 
mendous spread of Socialist ideas in Russia: they afford no 
real measure of the strength of the movement. The bulk 



THE NATIONAL SOCIALIST MOVEMENTS 305 

of the propaganda of Socialism has to be carried on by 
literary agencies, and the publication or distribution of 
Socialist literature of any kind being a crime in Russia, this 
work involves terrible peril to those who engage in it. We 
get some idea of the strength of the movement when we 
consider that from 1905 to 1910 tens of thousands of Social- 
ists were either imprisoned, exiled to Siberia, executed, or 
compelled to flee from the country to escape from these. 
Another indication of the immense strength of Russian 
Socialism is the fact that in 1909 the Central Committee 
of the Socialist Revolutionists alone spent $40,000 upon the 
distribution of more than two million Socialist leaflets, 
pamphlets and books, and that its total income was almost 
$85,000. 

(9) Finland 

Political conditions: Finland was ceded to Russia by 
Sweden in 1809, and was granted a relatively liberal constitu- 
tion which gave the Finns complete autonomy in all local 
affairs. During the greater part of the nineteenth century, 
therefore, Finland was practically an independent State with 
the Czar of Russia as its Grand Duke. Beginning with the 
year 1894, under the administration of the notorious Gover- 
nor-general Bobrikoff, Russia inaugurated a policy of Rus- 
sianizing Finland. In 1898, in violation of his oath, the 
Czar issued a decree asserting the power of the Imperial 
Government over many of the internal affairs of Finland, 
particularly over military affairs. The Finnish people have 
resisted every attempt to destroy their liberties, and in 1901 
completely frustrated the attempt of the Russian govern- 
ment to destroy their militia system and establish Russian 
military law. 

Rise of the Socialist movement: There was no organized 
Socialist movement in Finland until after the decree of 1898. 
In the next year after that event a Labor Party was organ- 
ized, which in 1903 changed its name to Social Democratic 
Party. The new party carried on a tremendous agitation for 
the extension of the suffrage and other measures of demo- 
cratic reform, and in 1905, mainly as a result of that agita- 
tion, a new act was passed granting full and equal suffrage 



306 ELEMENTS OF SOCIALISM 

to all adult persons over twenty-four years of age, regardless 
of sex, with proportional representation. This makes the 
constitution of Finland the most democratic of any country 
in the world. 

In the elections of 1907, the first in which the Social 
Democratic Party participated, the party vote was 329,946, 
being 36.7 per cent of the total number of votes cast. The 
number of Socialists elected was eighty out of a total of two 
hundred. The Diet was dissolved by the Russian Governor- 
general in 1908, in 1909, and again in 1910, and each time 
the Socialists polled a larger percentage of the votes and 
elected a larger proportion of the members of the Diet. 
In 1910, when the present Diet was elected, the Socialists 
polled forty per cent of the total vote and elected eighty-six 
members, of whom ten were women. 

The decree of 1909: Backed up by a subservient Duma, 
the Czar issued a new decree in 1909, practically abolishing 
the Finnish constitution, providing for the representation of 
Finland in the Russian Duma, and reducing the Finnish 
Diet to the status of a Provincial Assembly. The Finns 
have with remarkable courage and heroism refused thus far 
to recognize the decree or submit to it in any manner. 

In addition to the parliamentary strength already noted, 
the Socialists had 351 representatives in various municipal 
councils in 1910. The movement in Finland is essentially 
Marxian, its program being very similar to that of the 
Austrian movement. The party membership in 1908 was 
71,266. The party has a very powerful press and enjoys 
the full confidence of the trade unions. Upon the whole, it 
may be said that, in proportion to its population, Finland 
has the largest and strongest of the national Socialist parties. 

(10) The Scandinavian Countries 

Sweden: The Swedish Social Democratic Party was 
founded in 1889. For fifteen years the party devoted itself 
almost entirely to agitation in behalf of universal suffrage. 
The characteristic method of the Swedish Socialists has been 
the general strike. In 1897 the party elected its first repre- 
sentative to the Riksdag, and in 1905, after the granting of 



THE NATIONAL SOCIALIST MOVEMENTS 307 

a partial electoral reform, which did not change the class 
character of the Senate, the Socialists elected thirteen mem- 
bers to the Riksdag, as against four in the preceding elec- 
tion. In 1909, after a further extension of the franchise, 
the party polled 75,000 votes, or twenty-four per cent of 
the total vote cast, and elected thirty-six members out of 
a total of 165. The long and disastrous general strike of 1909 
greatly weakened the party by reducing its membership and 
its financial strength, but it is now rapidly improving. In 
the elections of 1911 the party polled 170,299 votes and 
elected 64 members to the Riksdag. 

Norway : The first entrance of representatives of the Social- 
ist movement into the Storthing, the Norwegian Parlia- 
ment, was in 1903, when the Social Democratic Party elected 
four members, including Dr. Erickson, a Lutheran clergy- 
man, and Professor Berge, the only Roman Catholic in the 
Parliament. The total vote cast for the candidates of the 
party was about thirty thousand. The Social Democratic 
Party was founded as the Labor Party in 1889. 

After the separation of Norway from Sweden, the Social- 
ists worked hard for a republic, but were defeated. In 1906 
the Socialist vote was -increased by fifty per cent and ten 
members were elected to the Storthing. In 1909 the party 
polled 90,500 votes out of a total of 345,000 and elected 
eleven members to the Storthing out of a total of 123. The 
Social Democrats had in 1910 no less than 873 representatives 
in municipal councils. The party in Norway has had the 
advantage of working under a very democratic constitution. 
There is universal manhood suffrage above the age of 
twenty-five years, and partial woman suffrage. The Social- 
ist press of Norway is very influential. 

Denmark: The Socialist movement in Denmark began 
with the old International, and the party newspaper, the 
Social Demokraten, dates from 1871, and is one of the oldest 
Socialist papers now in existence. It has a circulation of 
56,000. The present Social Democratic Party was estab- 
lished in 1878. In 1889 it elected its first representative 
to the Folkething. The party has taken an active part in 
the agrarian struggles of Denmark, and has the support of 
the peasant farmers and agricultural laborers. 

In 1906 the party polled 77,000 votes and elected twenty- 



308 ELEMENTS OF SOCIALISM 

four members to the People's Chamber — the Folkething — 
and four to the Senate. In 1910 the Socialist vote was 98,721, 
but the representation in both chambers of Parliament 
remained the same. There are 114 members in the lower 
house, all chosen by direct suffrage, and 66 in the upper 
house, of whom only twenty-seven are chosen by the general 
voters. The Social Democratic Party has (1911) more than 
1,000 municipal and local councillors. The Danish Social 
Democratic Party has the record of having polled a con- 
tinuous and almost uniform increase of votes at every tri- 
ennial election since 1878. 



(11) Holland 

Domela Nieuwenhuis : The Socialist movement in Holland 
first arose in 1878, under the leadership of Domela Nieu- 
wenhuis, the eloquent Lutheran minister who left his 
pastorate to preach Socialism. The movement suffered the 
bitterest persecution, but in 1888 Nieuwenhuis was elected 
to Parliament. There his failure to make headway against 
the older parties led him to despair of parliamentary action, 
and in 1893 he renounced Socialism and declared himself 
to be an Anarchist-Communist. The present Social Demo- 
cratic Labor Party was founded in 1894 by twelve of the 
most prominent Socialists in Holland, who were at once 
dubbed "the Twelve Apostles" by their opponents. Among 
these twelve were Pieter J. Troelstra, a lawyer, who is still 
the political leader of the party, and Henry Van Kol, a civil 
engineer, who is the ablest of the party's writers and speakers. 

In 1897 four Socialists were elected to Parliament, and in 
1901 this was increased to seven, at which number it has 
stood ever since, despite the fact that the popular vote cast 
for the party increased from 38,297 in 1901 to 82,494 in 1909. 
The secession of Nieuwenhuis and his followers proved to 
be only the beginning of a long conflict between the Social- 
ists and the Anarchists. The trade union movement has long 
been largely under the influence of the Anarchists, and is 
opposed to parliamentary action. This has prevented any 
general support of the party by the organized working 
class. 



THE NATIONAL SOCIALIST MOVEMENTS 309 

Internal dissensions: In 1905 a new source of difficulty 
appeared. The reactionary clerical ministry under Dr. 
Kuyper, who had suppressed the railway strike of 1903 with 
unnecessary brutality, was defeated by a narrow margin, 
and the seven Socialist members of the Chamber found them- 
selves holding the balance of power between the new coali- 
tion ministry and the deposed reactionaries, as neither of the 
other groups held a parliamentary majority. Having to 
make a choice between the two, the Socialists voted with the 
government and sustained it. This act was bitterly con- 
demned by the extreme radicals in the party as an abandon- 
ment of the principle of the class struggle. As a result 
there was a serious controversy which culminated in the 
withdrawal of the dissatisfied elements in 1908 and the 
formation of a new party, the Social Democratic Party. 
Its vote in the elections of 1909 was 1,888. 



(12) Switzerland 

Switzerland with its democratic constitution and tradi- 
tions has from the first days of the movement been a centre 
of Socialist activity, especially on the part of French, 
German and Russian exiles gathered at Geneva and Zurich. 
The industrial development of the country, however, has 
been slow and the political Socialist movement was late in 
starting. Until the formation of the Social Democratic 
Party in 1888, Socialist agitation had been carried on through 
the radical workingmen's societies, of which the Grutliverein 
was the most important. This society was started in 1838, 
and until recent years practically dominated the working 
class movement. 

In 1901 a union was effected between the Grutliverein, the 
trade unions and the Social Democratic Party. This union 
has not been entirely satisfactory. It contains many non- 
Socialist elements, whose influence has tended to modify 
the Socialist policy. Recently, however, a very considerable 
number of the non-Socialists have withdrawn. At the 
general election of 1908 the party increased its vote from 
70,000 to 100,000 and elected seven members to the Federal 
Council. 



310 ELEMENTS OF SOCIALISM 

(13) Spain 

Spain is the most backward country of Western Europe. 
It has never been highly developed industrially. Two-thirds 
of its people are illiterate and still suffer from the domination 
of a political church. In consequence, the Socialist movement 
in Spain is very weak. The abuses of autocratic government 
have developed one of the strongest Anarchist movements in 
Europe. 

The present Socialist Labor Party was organized in 1888 
through the efforts of Pablo Iglesias, an able journalist and 
agitator, and made steady progress until the war with the 
United States in 1898. In the industrial crises which fol- 
lowed the war the Socialist Labor Party and the trade unions 
suffered great losses in membership. The movement revived 
again after about six years, since which time it has made 
very steady gains. Following the uprisings in Barcelona 
in 1909, and the subsequent execution of Francisco Ferrer, 
the Socialists entered into an alliance with the Republi- 
cans to destroy the reactionary clerical ministry. This was 
accomplished, and with the assistance of the Republicans, 
Iglesias was elected to the Cortes in May, 1910, as the first 
Socialist representative. A number of the Republican 
representatives are also Socialists, though not nominated 
by the Socialist Labor Party or regarded as representing it. 

(14) Poland 

Since the final dismemberment of Poland in 1794 the Polish 
people have lived under what have been for them three 
foreign despotisms, Russia, Prussia and Austria. Each of 
these powerful nations has attempted to crush out the Polish 
national spirit by force, but persecution has in fact united 
the Polish people in spirit even more than they were ever 
united under their own kings. Consequently the Polish 
Socialist movement struggles not only for political and 
economic independence, but for national independence also. 
As one of their leaders has said: "The social, the political 
and the national revolution are for us one and indivisible" 1 

l B. A. Jcdrzcjowski in The Comrade, Dec, 1902. 



THE NATIONAL SOCIALIST MOVEMENTS 311 

The Socialist movement is very strong in Poland, but as 
in Russian Poland, which is most populous and in which 
the movement is strongest, the whole party organization and 
party activity is illegal, it is impossible to give a numerical 
estimate of the strength of the Polish Socialist Party. 

The Socialists in Galicia (Austrian Poland) have elected 
six members to the Austrian Reichsrat and are represented 
in the municipal councils of both Krakow and Lemberg. 
Aside from the political propaganda, the Galician Socialists 
initiated the university extension movement in their coun- 
try, and have undertaken much of the general educational 
work which is done in other countries by the government 
itself. 

The Polish Socialists in Germany have been subjected 
to more severe persecution than other Socialists in that 
country, because of the national and language complica- 
tions. They have, however, built up a strong organization 
and constitute an important factor in the movement. 



(15) Hungary 

The Socialist movement in Hungary dates from 1867, when 
an association of workingmen was formed on the lines laid 
down by Lassalle. Its members were hunted down as crim- 
inals, exiled, shot or imprisoned, and it was not until 1890 
that the movement became established. Political party 
organization has always been illegal and the movement has 
therefore been mainly carried on in the trade unions which 
are given a legal standing. The membership in these unions 
has increased rapidly and reached 130,120 in 1907, when an 
industrial crisis and increased government and capitalist 
persecution reduced the membership to 85,266 in 1909. 
About 300 unions with a membership of about 20,000 are 
in reality Socialist Party locals under the legal form of unions. 

The political work of the party has been mainly directed 
toward the attainment of the franchise for the working class. 
It has been impossible to contest parliamentary elections, 
and only in the municipalities, where the franchise is some- 
what less restricted, were any Socialists elected to office 
before 1910. The report of the Socialist Democratic Party 



312 ELEMENTS OF SOCIALISM 

to the Congress at Copenhagen in that year showed ninety- 
six representatives in fifteen communal councils. 



(16) Other Countries 

In nearly every country of the world we find at least the 
beginnings of a Socialist movement. Under the new Repub- 
lican regime in Portugal one Socialist has been elected to 
parliament. In Greece ten Socialists were elected to the 
National Assembly in 1910. Bulgaria and Servia both have 
Socialist parties affiliated with the International Socialist 
Bureau, and in the new Parliament of Turkey there are six 
Socialists, five of whom are Armenians, the other being a 
Bulgarian. Persia and China have been touched by the 
Socialist movement, and in Japan a relatively strong Social- 
ist movement has developed under the leadership of Sen 
Katayama, despite bitter persecution. Katayama reported 
to the International Congress in 1907 that there were 30,000 
conscious Socialists in Japan. The governmental repression 
was so severe in 1910 that the Japanese Socialist Party was 
unable to send a representative to the Copenhagen Congress. 
In South Africa and Australia there are organized Socialist 
movements, but much of the strength which would otherwise 
have gone to them has been absorbed by the Labor parties 
in those countries. The Australian Labor Party now has a 
clear majority in both houses of parliament. This makes 
the work of the Australian Socialists very difficult. In con- 
formity with a well-known rule, where a non-Socialist labor 
party is strong the organized Socialist movement is extremely 
narrow and dogmatic. In Canada the Socialist movement 
is still relatively weak, except in British Columbia, where 
three Socialists were elected to the Provincial Legislature in 
1 ( .)()7. Several of the Spanish- American countries have small 
Socialist parties, and in Chili and Argentina the Socialists 
have gained parliamentary representation. 



THE NATIONAL SOCIALIST MOVEMENTS 313 

SUMMARY 

1. The German Social Democracy was the earliest in origin and is 
numerically the strongest of all the national Socialist parties. Its 
program is Marxian, and it has always worked in harmony with the 
trade unions. 

2. The French Socialist Party is strong and its leaders are brilliant, 
but it has suffered from internal dissensions, and from anarchism and 
semi-anarchism both within and without the party. 

3. The Austrian Social Democracy has the largest parliamentary 
representation of any Socialist Party. It has won its fight for equal 
manhood suffrage. Its greatest obstacle lies in the national dissen- 
sions within the Austrian Empire. 

4. The Belgian Labor Party is relatively one of the strongest of 
Socialist groups. The distinctive feature of the Belgian movement is 
the high development of productive and distributive cooperation. 

5. The Italian Socialist Party is characterized by middle-class leader- 
ship. The movement in Italy has been divided into three groups; 
the " Reformists/ ' the anti-parliamentarian "Syndicalists," and the 
Marxian "Integralists." 

6. The British Socialist movement is represented by the rather 
narrowly Marxian, Social Democratic Party, and by the Independent 
Labor Party, which is allied for political campaign purposes with the 
non-Socialist Labor Party. 

7. The American Socialist movement is represented by the Socialist 
Labor Party and the Socialist Party. The latter party from its organi- 
zation in 1900 has grown very rapidly. Its program is Marxian. 

8. Socialism in Russia is outlawed, and effective political action is 
impossible. The Russian Social Democratic Party tries to prepare the 
way for revolution by secret organization, while the Socialist Revolu- 
tionary Party prefers terrorist tactics. 

9. In proportion to population Finland has the strongest of all 
Socialist parties. The Finnish party has won universal suffrage re- 
gardless of sex, and it leads the struggle against Russian aggression. 

10. Of the other countries Socialism is strongest in Norway, Sweden, 
Denmark, and Holland, and Socialist movements of varying strength 
exist in nearly every country of the world. 



QUESTIONS 

1. Compare the Gotha and Erfurt programs of the German Social 
Democracy. 

2. Discuss the attitude of the German party toward the trade unions. 

3. What are the chief differences in theory and tactics between 
the " Impossibilists " and the " Possibilists " in France? 



314 ELEMENTS OF SOCIALISM 

4. Compare the French Socialist Party with the German Social 
Democracy. 

5. How does the Italian Socialist movement differ from the move- 
ments in the northern European countries? 

6. Explain the relations between the Socialist and the Labor parties 
in Great Britain. 

7. -What were the causes of the split in the American Socialist Labor 
Party and the formation of the Socialist Party? 

8. Characterize briefly the following Socialist leaders: Lassalle, Bebel, 
Liebknecht, Jaures, Guesde, Adler, de Paepe, Morris, Hyndman, 
Hardie. 

Literature 

The chief sources for the national Socialist parties are their reports 
to the International Socialist Congresses. In addition the following 
works will be found useful: 

Bernstein, E., Ferdinand Lassalle. 

Dawson, W. H., German Socialism and Ferdinand Lassalle. 

Hillquit, M., Socialism in Theory and Practice, Appendix. 

Hillquit, M., History of Socialism in the United States. 

Hughan, Jessie W., American Socialism of the Present Day. Chap. 
Ill and XV. 

Hunter, R., Socialists at Work. 

Kirkup, T., History of Socialism, Chap. IX. 

Spargo, J., Karl Marx, His Life and Work, Chaps. XI, XII, and XIII. 

Villi ers, B., The Socialist Movement in England. 

Webb, Sidney, Socialism in Great Britain. 



PAKT V 
POLICY AND PROGRAM 



CHAPTER XXIII 

SOCIALISM AND SOCIAL REFORM 

Marx and Engels on social reform: Marx and Engels in 
the Communist Manifesto emphasized the importance of 
social and political reform and sketched a practical program 
for the betterment of the conditions of the wage-workers. 
That it was a crude and hastily sketched program, which has 
long since become antiquated to a large extent, is not here 
and now a matter of importance. What is significant is the 
fact that from the beginning Marx and Engels regarded 
agitation for reforms as a necessary part of proletarian 
activity. Eighteen years later, in the practical program 
which Marx drafted for the International, we find measures 
like the eight-hour work day and free, popular education 
given conspicuous place. 

Marx and Engels understood and set forth with remarkable 
clearness and strength the need for physical, mental and 
moral efficiency on the part of the workers as prerequisites 
of their success. They understood and pointed out the 
unfitness of the slum proletariat, whose conditions of life 
necessarily fit it to be a reactionary force rather than a 
progressive and revolutionary force. On the other hand, 
they proclaimed the increasing misery and degradation of 
the proletariat in terms which compel us to conclude that 
they did not believe much could be done by the economic 
and political organization of the proletariat to check that 
misery and degradation. There is a terrible fatalism in the 
manner in which they picture the degradation and pauper- 
ization of the workers as one of the conditions essential to 
comprehensive social change: 

"The modern laborer . . . instead of rising with the 
progress of industry, sinks deeper and deeper below the con- 
ditions of existence of his own class. He becomes a pauper 
and pauperism develops more rapidly than population and 

317 



318 ELEMENTS OF SOCIALISM 

wealth. And here it becomes evident that the bourgeoisie 
is unfit any longer to be the ruling class in society. ... It 
is unfit to rule, because it is incompetent to assure an exis- 
tence to its slave within his slavery, because it cannot help 
letting him sink into such a state that it has to feed him, 
instead of being fed by him. Society can no longer live 
under this bourgeoisie, in other words, its existence is no 
longer compatible with society." 

Thus we find in the thought of Marx and Engels, in their 
mingled hopes and fears, something of the contradiction and 
conflict which mark the evolution of Socialist political policy. 
Practical constructive programs are not for men who believe 
that, despite everything that may be done, things must go 
from bad to worse; that the capitalist system must crush the 
workers down and deny them the minimum necessities of 
life; that at last a depth must be reached when the workers 
will be forced by the instinct of self-preservation to revolt, 
and so end the rule of the master class. On the other hand, 
men who believe these things cannot at the same time 
believe also in the triumph of the working class in any con- 
flict except that of brute force, and then only as a result of 
their overwhelming numbers. Nor can they recognize the 
weakness and inefficiency of the most submerged class, the 
slum proletariat, and maintain their hope for the fu- 
ture unimpaired. For it is the essence of their belief 
that the proletariat as a whole must be reduced to that 
state. 

Revolutionism versus opportunism: In nearly every coun- 
try in which there is a considerable Socialist movement we 
find two distinct and conflicting elements within the move- 
ment. There is almost invariably an extreme Left wing and 
an extreme Right wing, to which the terms " Revolutionary/ ' 
and "Opportunist," or some equivalent of them, are applied. 
Broadly speaking, the Socialist movement everywhere at- 
tracts two distinct types of mind, the mind that is dis- 
trustful of all attempts to reform existing society and sees no 
hope in anything short of a complete transformation of 
society, and the mind that, while equally desiring the trans- 
formation of society, believes that it must be effected within 
the existing order to a very large extent, by means of 
the progressive improvement of conditions. Under strong 



SOCIALISM AND SOCIAL REFORM 319 

leadership those who hold these divergent views become 
crystallized into factions. 

While the movement in different countries varies greatly, 
alike in characteristic features and historical development, 
it may be said that, as a rule, violent opposition to social 
reforms within the existing order is associated with the 
immaturity and weakness of the organized Socialist move- 
ment, and that as the movement grows stronger it becomes 
of necessity the central force in promoting social and politi- 
cal reforms. The truth of this generalization is admirably 
illustrated in the history of the German Social Democracy 
and its great leaders. 

Evolution of parliamentary tactics in Germany: It is a far 
cry from the negative iconoclasm of Liebknecht and his 
followers in the early years of the movement to the con- 
structive Socialist statesmanship of later years. In 1867 
Liebknecht urged that the Socialist members should enter 
parliament only to read a declaration of protest, and then 
leave the house. He even denied that election to parlia- 
ment offered any advantages for carrying on Socialist pro- 
paganda. Against the view of Bebel and others that the 
Socialist members could at least "speak through the win- 
dows" of parliament to the workers throughout the country, 
he scornfully urged that the workers could be better reached 
outside. By 1870 he had come to realize the strategic 
advantage which the "windows of parliament" gave the 
Socialist propagandist and agitator, and in that year at the 
Stuttgart Congress he and Bebel wrote a resolution, which 
was adopted, setting forth that, while the party's representa- 
tives in parliament must as far as possible work for the 
interests of the working class, on the whole a negative, 
critical attitude must be maintained. 

The idea of using their political power directly to secure 
reforms made headway very slowly. At Coburg in 1874 it 
was declared that the emphasis must be placed upon propa- 
ganda, and thirteen years later, at the St. Gall Congress 
of the united party, a similar declaration was adopted, except 
that the word "agitation" was used instead of "propaganda." 
At the Halle Congress in 1890 an immense gain was regis- 
tered, the Socialist representatives in the Reichstag being 
instructed to press the Socialist demands and to work for 



320 ELEMENTS OF SOCIALISM 

palliative reforms possible within the existing state. The 
Erfurt Program, adopted in 1891, contains a series of prac- 
tical proposals, or "immediate demands," which can only 
be interpreted as meaning that the Social Democracy has 
definitely chosen to rest its hope upon the enlightened and 
conscious effort of the proletariat, rather than upon those 
tendencies in economic evolution which Marx believed to be 
irresistibly making for proletarian degradation and economic 
cataclysm. 

The value of social reforms: In his speech at the Erfurt 
Congress in support of the social reforms proposed in the 
program, Liebknecht frankly declared the abandonment of 
the view that Socialism flourishes best upon the misery of 
the masses. Speaking in support of the new program, he 
said : "Formerly people used often to say that the only means 
of winning the masses to Socialism was to leave them alone 
till their impoverishment was completed, and then despair 
would bring them to us, but no one believes in that nonsense 
any longer." Bebel also spoke in favor of the new tactics, 
but seemed to base his support upon the fact that the reforms 
advocated would win the votes of a large number of workers, 
rather than upon an appreciation of the value of the reforms 
themselves. Von Vollmar, one of the ablest of the leaders of 
the Opportunist wing of the party, noted this, and urged 
that the real motive of the party in advocating the social 
reforms ought to be the value of the reforms as substantial 
advances towards Socialism, and the fact that they would 
actually improve the fighting powers of the proletariat. 
In 1892, at the Berlin Congress, the annual report of the 
Socialist members of the Reichstag to the party practically 
affirmed Von Vollmar's view. It incorporated social reform 
into the concept of social revolution. Social reform, it 
declared, "serves to furnish the proletariat with a little 
more of the means of battle which they require in order to 
fulfil their historic mission." 

Since that time there has been no disposition to return to 
the old tactics of mere negative criticism. All sections of the 
party recognize that if the Social Democracy is to be the 
party of working-class emancipation it must fight for the 
present interests of the workers, and do all that is possible 
to improve their conditions. At the Stuttgart Congress 



SOCIALISM AND SOCIAL REFORM 321 

of 1898, Von Vollmar declared that "He who raises the posi- 
tion of the working people, economically, politically, intel- 
lectually, increases their strength for further battles, and 
places a sure foot on the way leading to the final seizure of 
the powers of the State." At the Hanover Congress in the 
following year a similar view was expressed by the much 
more radical Clara Zetkin: "We promote these reforms, 
not to win the masses, but to raise them. With slaves 
breaking their chains you may make a momentary riot, 
but you cannot build a new society. Our whole reform is 
directed to this end, to raise the working class to a higher 
economic, intellectual and moral level; and I subscribe 
with both hands to the remark of Comrade Adler that we 
must work with our whole might for those demands of the 
present, just as if we were working for the attainment of 
our great goal itself." 

Social Democracy and social reform: One result of this 
evolution of tactics and policy is that the Social Democracy 
is universally acknowledged to be the central and most power- 
ful force making for social reform in Germany to-day. Even 
in the seventies, before the adoption of a constructive par- 
liamentary policy by the party, the actual propaganda dealt 
to a considerable extent with such practical matters as the 
need of insurance against accident and old age, factory legis- 
lation and the abolition of child labor. Lassalle had em- 
phasized the socialization of the State, and demanded State 
aid and protection for the workers. His influence upon the 
practical propaganda of the time was enormous. Theorists 
might talk about the disappearance of the State, but the 
workingman who addressed his fellow workingmen was much 
more likely to urge that the State ought to protect its useful 
citizens. 

When in 1884 Bismarck announced his program of social 
legislation, he admitted in the Reichstag that he had taken 
those features of the Socialist propaganda which he believed 
to be practical, and that he hoped thus to wean the masses 
from the Social Democracy. His confession was as blunt 
as it could be: "Give the workingman the right to work as 
long as he has health. Assure him care when he is sick, 
and maintenance when he is old. If you will do that without 
shrinking from the sacrifice, and do not cry out 'State Social- 



322 ELEMENTS OF SOCIALISM 

ism' . . . then I believe that the gentlemen of the Weyden 
(Social Democratic) program will sound their bird-call in 
vain; and as soon as the workingmen see that the govern- 
ment is earnestly concerned for their welfare, the thronging 
to them will cease/ ' 

The Social Democrats were not in the least disturbed at 
the prospect of having their arch opponent "steal their 
thunder " in this manner. They knew perfectly well that no 
party of the ruling class could ever concede all that the 
material interest of the working class demands. They knew 
the workers too well to believe that any sop of concessions 
made by the masters would satisfy them, and believed rather 
that all such concessions would increase the appetite of the 
workers and cause them to demand more and more. They 
did not doubt their ability to keep the Socialist program 
far in advance of any ministerial program. Bebel took 
advantage of Bismarck's admissions to point out that Bis- 
marck was now the acknowledged pupil of the Social Demo- 
crats, that the great Chancellor had not only admitted the 
existence of a grave problem which had heretofore been 
declared not to exist, but had accepted the remedial policy 
advocated by the Socialists. The result was certain to be 
an increase of popular confidence in the wisdom and fore- 
sight of the Social Democrats, he declared. That Bebel was 
right has been abundantly proven by the experience of 
more than a quarter of a century. In almost every country 
in which there is a strong Socialist movement similar attempts 
have been made to wean the masses from Socialism by 
granting some of the reforms in the Socialist program, but 
without any marked success. 

The new tactics and "Marxism": The change in the tac- 
tics and policy of the Social Democracy has been very com- 
monly regarded as a definite departure from Marxism. 
This is true if by Marxism is meant simply the theory of the 
increasing misery of the proletariat. But that generalization 
18 not only not the whole of Marxism, it is not essential to it. 
Indeed, the generalization may be regarded as having no 
legitimate place in Marxian theory. It is an interjection, 
inconsistent with the rest of the teachings of Marx and Engels. 
Afl we have already seen, it is not consistent with the pro- 
gram outlined in the Communist Manifesto, nor with the 



SOCIALISM AND SOCIAL REFORM 323 

practical program of the International. It is essentially 
a false note, due to the over-emphasis of the great impelling 
forces of economic evolution and the under-valuation of the 
human factors. If by Marxism we mean the fundamental 
thought of Marx and Engels, the thought which dominated 
and guided their life-work, and the practical policies they 
advocated, the change in tactics may be regarded as a return 
from an incidental and foreign element in the statement of 
Marxism to the fundamentals of Marxism. The utterances 
of Von Vollmar and Clara Zetkin, the one a leader of the 
Opportunists and the other of the Revolutionists, are quite 
in harmony with the utterance of Marx himself upon the 
passage of the Ten Hours 7 Bill in England. 1 

Social reform and the class struggle: The policy of pro- 
moting social reform is not less revolutionary than the policy 
of refusing to work for present betterment, but more so. If 
by social revolution we mean a social reality, a result to be 
attained through the unified efforts of the working class, the 
Opportunist who unites the workers upon the basis of their 
class interest, and enables them to improve their position 
and equip themselves for more effective resistance and 
aggression is a better Revolutionist than he who merely 
denounces present conditions and holds out to the workers 
the hope that, when their class has been sufficiently pauper- 
ized, brutalized and dehumanized there will be a successful 
revolt. To the modern Socialist, as to Marx, social revolu- 
tion is not so much a method as a result. That result is the 
transformation of capitalist society into Socialist society, 
and will be quite as revolutionary if accomplished by a 
generation of peaceful evolution as if accomplished in a week 
of bloody revolt. 

We recur again to the central motif of modern Socialism, 
the class struggle. The social reform policy of the German 
Social Democracy and all other Socialist parties is based 
upon the doctrine of the class struggle and is shaped by 
the actual class conflict. The workers must resist all those 
forces which tend to lower their standard of living, they must 
wage war against exploitation and for better conditions. So 
much is involved in the class struggle itself. If the Socialist 
movement is to be an expression of that struggle, it must 

1 In the Inaugural Address of the International; 1864. 



324 ELEMENTS OF SOCIALISM 

necessarily participate in the efforts which the workers make 
to better their conditions. The class struggle as a reality, 
then, forces the Socialist parties of the world to be aggressive 
champions of every measure for the present betterment 
of the lot of the workers. 

Illustrative value of Germany's experience: The impor- 
tance of this detailed account of the evolution of Socialist 
tactics in Germany lies in the fact that the experience of the 
German Social Democracy has been repeated by nearly 
every national Socialist party. The change from the tactics 
of sterile dogmatism to fruitful practical politics is both a 
cause and an effect of growth. In the beginning the Socialist 
movement is almost invariably characterized by dogmatism, 
fanatical bitterness and sectarian intolerance. Its first 
political victories are usually won in spite of these things, 
often through circumstances which lead to the election of 
Socialist candidates not because of their Socialism, but rather 
in spite of it. But in every country it has been found that 
with the election of even a single representative to an 
important legislative or executive office a change of temper 
and policy begins to manifest itself. The propaganda 
becomes more practical and less theoretical. Wild, irrespon- 
sible talk of a sudden revolution is less frequently indulged in, 
and there is less disposition to sneer at social reforms. The 
movement devotes more and more of its energies to the 
task of bringing about the betterment of the lot of the 
workers. 

Brought face to face with opportunities to improve the 
conditions of the working class, the Socialist Party dares not 
neglect them. Even though the specific reform proposed 
may be small and, of itself, relatively insignificant, the 
instinctive class consciousness of the Socialist representatives 
prevents them from opposing or ignoring it and indulging 
themselves in denunciations of capitalism or prophecies of 
a cooperative commonwealth. In other words, election of 
even a few of its representatives to office brings the Socialist 
movement to a point at which it must face reality and choose 
between dogmatism and life; between loyalty to a creed 
and loyalty to the working class. Little groups or factions 
may cling to the dogmatism and remain as narrow and 
embittered sects, but the movement as a whole chooses the 



SOCIALISM AND SOCIAL REFORM 325 

opposite course. This is illustrated in the history of the 
Socialist movement in England and the United States as 
completely as anywhere in the world. 

Far-reaching results of the policy: The results of this 
broadening of Socialist policy and tactics extend far beyond 
the sphere of political action. It effects also the relation of 
the political Socialist movement to other phases of the 
working class movement. The same reasoning which keeps 
the Socialists in the early, dogmatic stages of the movement 
from recognizing the value of social reforms acquired by 
legislation, keeps them from recognizing the value of im- 
provements brought about by the action of the trade unions 
or the cooperative societies. So long as the assumption 
upon which the Socialist policy is based is that the masses 
must be reduced to abject pauperism before Socialism can 
triumph, every attempt to prevent that pauperization will 
be looked upon as retarding the social revolution. Not until 
the movement frankly abandons that position and accepts 
the view that every gain of the working class better fits it 
for its great mission of destroying class rule, is it possible 
for all phases of the organized working class movement to 
work in harmony. 

Socialism and cooperation: Workingmen's cooperative 
societies long antedated the rise of the modern Socialist 
movement in England. When the latter appeared the 
cooperative movement was already more than fifty years old, 
for in 1830 there were upwards of 300 cooperative societies 
in the United Kingdom with a membership of more than 
20,000.* While cooperation had not solved the social prob- 
lem as the founders of the movement imagined, it had 
greatly benefited that portion of the working class which it 
had succeeded in embracing within its membership. To build 
up and maintain such a movement had required courage, 
self-reliance, sobriety, foresight, organizing capacity and a 
high order of intelligence — all qualities essential to a suc- 
cessful, militant working class movement. Had the Social- 
ists of the time not been obsessed by the notion that the 
cooperative societies by improving the economic conditions 
of their members were so many obstacles to the coming of 
Socialism via unlimited misery, the story of British Socialism 

1 Holyoake, History of Cooperation, 1875, Vol. I, pp. 152-153. 



326 ELEMENTS OF SOCIALISM 

might have been very different. As it was the early Social- 
ists frequently went out of their way to disparage cooperation 
as a conserving force, and thus set up a barrier between the 
two movements which has not yet been wholly removed. 
Much of the early Socialist propaganda was addressed to 
the slum proletariat, upon the assumption that the poorest 
and most miserable would readily respond to the Socialist 
message. Of course, this proved to be quite far from the 
truth. In England, as elsewhere, this element is the least 
responsive to the Socialist appeal. Invariably, Socialism 
makes its greatest progress among the best paid and best 
organized workers. Not until the rise of the Independent 
Labor Party in 1893 was any considerable progress made 
among the cooperative societies. 

Belgian Socialism affords a striking contrast to British 
Socialism in this respect. The Belgian movement has never 
been very dogmatic. From the first it has included every 
phase of distinctively working class organization and aspira- 
tion. It has embraced the cooperatives, the trade unions, 
the friendly societies and the political movement. From 
England the Belgians took the cooperative associations and 
the trade unions; from Germany they took the fundamental 
theories of Socialism and general party tactics; from France 
they took the conception of Socialism as a great spiritual 
ideal and force, "a continuation of Christianity" as Vander- 
velde once described it. Thus we find that in Belgium the 
conflict between the cooperatives and the political Socialist 
movement has never developed to any extent, and the 
Socialist movement includes the cooperative movement. 

Socialism and trade unionism: The relation of the 
political Socialist movement to the trade union movement 
illustrates the same principle. Trade unionism antedates 
the modern Socialist movement by a great many years. 
As far back as 1720 the master tailors of England complained 
to parliament that 7,000 journeymen had "entered into 
combination to raise their wages and leave off working an 
hour earlier than they used to do," and parliament responded 
by enacting a law prohibiting all such combinations. 1 Two 
years before that, in 1718, a royal proclamation against 
'lawless clubs and societies" among workmen had been 
1 Wcbb, History of Trade Unionism, p. 27. 



SOCIALISM AND SOCIAL REFORM 327 

issued. 1 In the United States, even, we find aggressive local 
unions of printers as early as 1786, and of shoemakers as 
early as 1794. 2 Long before the Communist Manifesto, 
therefore, trade unionism was already well established in 
England, and, to a less extent, the United States. It had 
done much to improve the conditions of the workers in many 
trades, as Marx himself recognized. The movement had 
grown in the face of bitter persecution on the part of the 
master class, the only parallel to which in modern times is 
the persecution which the Socialist movement has had to 
endure. 

When the International was formed trade unionism in 
England and the United States was a real power. In France 
there were many unions which won partial legal recognition in 
1864, the year in which the International was founded. In 
Italy there were several unions, largely dominated by 
Mazzini. Local trade unions had appeared in Germany, 
though it was not until 1865 that the first national German 
trade union was formed by followers of Lassalle, and therefore 
closely allied with the Socialist movement from the very 
beginning. 

The International and the trade unions: Through the 
International Marx brought about a close relation between 
the trade unions and the Socialist movement of the time. 
Here as always Marx subordinated dogma to the central fact 
of the class struggle. The unions were fighting organizations 
of workingmen, therefore they must be welcomed as a part of 
the working class movement and any attempt on the part 
of the Socialists to antagonize the unions was severely con- 
demned. Marx himself believed that the British trade unions 
were destined to become the most revolutionary Socialist 
organizations in Europe. All through the life of the Inter- 
national there was active cooperation between the trade 
unions and the Socialists in England and America as well 
as in continental Europe. 

Rise of the new Socialist movement in England: Almost 
a decade had passed after the death of the International 
before the rise of the new Social Democratic movement in 
England. As we have seen, the leading spirits of the new 

1 Webb, op. cit., p. 29. 

2 Documentary History of American Industrial Society, Vol. V, p. 20. 



328 ELEMENTS OF SOCIALISM 

movement were not workingmen, but members of the middle 
class. They were dogmatists of an extreme type. In their 
attitude toward the trade unions they alternated between 
flattery and bitter insults. Regarding themselves as the 
preachers of the only true gospel, they set forth to convince 
the trade unions that their ways were wrong, to show them 
that the small improvements in wages and hours of labor 
which they gained from time to time were in reality not gains 
but losses, since they postponed the complete emancipation 
of the working class. 

When they cooperated with the trade unions, as a ruie 
it was not because they had a common faith with the trade 
unions, not because they earnestly desired to attain the 
object for which the unions were striving, but because they 
hoped to make converts, to win the unions to the Socialist 
point of view. They wanted to "capture the trade unions" 
for Socialism. Above all, they wanted the unions to become 
political organizations, auxiliaries of the party. They urged 
the unions to adopt the Socialist program and even to make 
acceptance of Socialist principles and the support of Socialist 
candidates conditions of membership. Naturally, the 
leaders of the unions resisted these attempts and resented the 
general depreciation of trade unionism by the Socialists. 
They were attempting to unite all the workers of a trade, 
regardless of their religious or political beliefs. They had 
already more than enough obstacles to overcome, and if 
they had followed the counsel of the Socialists they would 
have seriously divided their forces. It was inevitable, 
therefore, that a conflict should develop between the new 
movement with its dogmas and the old movement with its 
practical problems. 

The issue in America: The story of the relations of the 
two movements in the United States is in many ways very 
similar to that of the English conflict. From 1878 to 1893 
the friendly relations which had existed between the Social- 
ists and the trade unions during the period of the International 
were gradually weakened. The trade union movement was 
the older organization. It was indigenous, and when the 
Socialist Labor Party arose was about entering upon a 
period of phenomenal growth. In 1878 the first convention 
of the Knights of Labor was held, and three years later the 



SOCIALISM AND SOCIAL REFORM 329 

Federation of Trade and Labor Unions, the body from which 
the American Federation of Labor developed, was formed. 
There were hundreds of thousands of American workingmen 
organized into unions. Frequently these unions adopted 
platforms or other declarations of principles which reflected 
the influence of the earlier Socialist agitation and came very 
near to the modern Socialist position. 

On the other hand, the Socialist Labor Party was numer- 
ically weak and composed mainly of foreigners, many of 
them ignorant of the language of the country, and most of 
them unfamiliar with its institutions and laws. Under the 
circumstances, it was natural that the Socialists should 
regard the trade unions as favorable fields for their propa- 
ganda. It was equally natural that the trade union leaders 
should resent their propaganda in so far as it consisted of 
criticisms of their policies, and endeavors to commit the 
unions to the support of the Socialist Labor Party. As in 
England, the Socialist attitude toward the unions alternated 
between flattery and bitter insults. An element developed 
within the party which insisted that the unions must be 
opposed, because they were so many obstacles in the path 
of the Socialist movement. Sometimes this element con- 
trolled the party and the attacks on the unions were very bit- 
ter. At other times the party swung to the opposite extreme 
of flattery. When great strikes and lockouts took place the 
Socialists were always ready with help, moral and financial. 
But even this friendly service was not always disinterested. 
There was always the old desire to "capture the unions/' 
and the leaders of the unions recognized the fact. Then, too, 
the Socialists further alienated the trade unions by their 
frequent association with the Anarchists. 

With the formation of the Socialist Trade and Labor 
Alliance in opposition to the American Federation of Labor 
and the Knights of Labor, and the resolution of the national 
convention of the Socialist Labor Party in 1893 condemning 
the existing trade unions as hopelessly corrupt, open war 
was declared between the Socialists and the trade unions. 
If the capitalist class of the country had set all its brightest 
retainers to invent a plan of checking the Socialist movement, 
they could not have invented a better one than the Socialists 
themselves had devised. One of the first acts of the seces- 



330 ELEMENTS OF SOCIALISM 

sionists from the Socialist Labor Party in 1899 was the 
passage of a resolution repudiating the Socialist Trade and 
Labor Alliance, and proclaiming friendliness toward the 
trade unions. The foundations of a peace policy were being 
laid. 

Policy of the Socialist Party: But even after the rise of 
the new Socialist Party with its wider and saner policy, 
the idea long persisted that the political Socialist movement 
must act as a sort of schoolmaster to the trade union move- 
ment. Not for a long time was there any sign of a recog- 
nition of the trade union movement as simply another 
branch of the general working class movement, an equal, 
not a subordinate. Year after year in the conventions of the 
American Federation of Labor, and in the local labor 
councils, the Socialists struggled for the adoption of resolu- 
tions indorsing the program and political policies of the 
Socialist Party. Every such attempt failed and succeeded 
only in reviving old and bitter quarrels or creating new ones. 

The German experience : The present official policy of the 
Socialist party of the United States recognized the right of 
the trade unions to manage their own affairs, and treats the 
trade union movement as an equal partner. This policy 
accords exactly with the policy of the German Social Democ- 
racy and with the ideas of Marx. It may be said to be the 
first adoption of a truly Marxian policy so far as the party's 
relation to the unions is concerned. 

Although the first national trade union in Germany was 
founded by Wilhclnj. Fritzsche, a Lassallean Socialist, and 
was from the first dominated by Socialist ideas, other unions 
sprang up at about the same time, many of which, like the 
British trade unions after which they were patterned, de- 
clared for strict neutrality in politics. The overwhelming 
sentiment of the Lassallean Socialist movement was against 
the trade union movement. It was a cardinal principle of 
the Lassallean school that only the political movement could 
improve the condition of the workers; that the unions were 
only stumbling blocks. In 1872 this sentiment had grown 
so strong that a resolution was adopted at the annual con- 
gress of the Lassallean organization warning the members 
against advancing the unions at the expense of the political 
movement. 



SOCIALISM AND SOCIAL REFORM 331 

The Marxist attitude: In that same year the Marxist 
organization adopted a radically different resolution. It 
urged all the members of the organization to help the trade 
unions in every possible manner, and condemned the resolu- 
tion adopted by the Lassallean faction. This resolution 
declared that: 

"In consideration of the fact that the capitalist power 
equally opposes and exploits all workingmen, no matter 
whether they are conservatives, liberals, or Social Demo- 
crats, this congress declares it to be the sacred duty of the 
workingmen to lay aside all party strife, in order to create 
the conditions for a vigorous and successful resistance on the 
neutral ground of a united trades union organization, to 
secure their threatened existence and to conquer for them- 
selves an improvement in their class conditions." 

In adopting this resolution the Eisenachers were following 
closely the advice which Marx had given three years before. 
"The trades unions should never be affiliated with or made 
dependent upon any political society. ... If this happens 
it means their death-blow/' Marx had declared in 1869, 
and then went on to argue that the improvement of their 
conditions, the better education and improved physical 
efficiency, which the workers obtained through the unions 
would lead them to Socialism. Thus we find Marx, as ever, 
basing his hope upon the improvement of the lot of the 
workers, rather than upon their complete subjugation. 1 

Policy of the united party: In reality the Marxian Social- 
ists took in 1872 a position toward trade unionism which 
they logically should have taken toward social reform, but 
did not until twenty years had passed away. After the union 
of the two factions in 1875 the united party adopted the 
Marxist policy. But it was years before the party abandoned 
the attitude of schoolmaster toward the unions. Bebel 
himself has confessed that at first the Social Democrats 
regarded it to be the special mission of the trades unions to 
serve as recruiting grounds for the party propaganda, pre- 
paratory schools for Socialists. The unions were urged to 
"keep politics and religion out of the unions/ ' but at the 
same time they were asked to join the Social Democratic 
Party, to endorse its candidates and support it financially. 

1 Cf . Karl Marx, His Life and Works, by John Spargo, p. 248. 



332 ELEMENTS OF SOCIALISM 

In recent years, however, the ideas of Marx have completely 
prevailed in the policy of the party toward the unions. It 
is now fully understood that to attempt to have the unions 
endorse or join any party, Socialist or other, would create 
weakening dissensions. The unions are urged to avoid 
party politics, and to confine their political activities to 
furthering those specific measures intimately effecting their 
immediate interests upon which the workers instinctively 
unite, regardless of their political beliefs. The party now 
trusts to its power to win the individual union member. 

The evolution of Socialist tactics, then, has in nearly 
every country effected not only the attitude of the Socialist 
parties toward social reforms secured by legislation, but 
their attitude toward the efforts of the workers to better 
their conditions through other agencies, notably the trade 
unions and the cooperative societies. Nothing could well 
be more fallacious than to regard these changes separately, 
as so many vote-catching concessions, dictated by political 
expediency. The fact is that we have to consider, not a 
number of independent changes, unrelated to each other, 
but a comprehensive evolution of Socialist policy away 
from the accidental and non-essential, in the direction of a 
more consistent application of the fundamental theories of 
Marx to the actual life-problem of the working class. A 
careful examination of the programs of the leading Socialist 
parties of the world will show that they are based upon the 
central thought of Marx, the class struggle. 

Socialists and social reformers: The Socialist Labor 
Party has a platform which is a compound of Lassalleanism 
and the "natural rights" theory of the eighteenth century, 
and contains no specific reform measures. The Socialist 
Party, on the other hand, has a platform which contains 
a large number of proposals aiming at the progressive im- 
provement of our economic, social and political institutions 
and conditions. A considerable part of the energy of the 
party is devoted to the promotion of these reforms. In 
these respects the Socialist Party follows the example of 
all the important Socialist parties of the world. However 
distasteful the term may be to some Socialists, therefore, 
the Socialist Party is a party of social reform and its members 
are social reformers. 



SOCIALISM AND SOCIAL REFORM • 333 

It frequently happens that other social reformers, who 
are not Socialists, seek the cooperation of the Socialists for 
the promotion of certain reform measures, and are surprised 
and disappointed when the Socialists decline to cooperate 
with them, and either regard their reforms with indifference 
or vigorously oppose them. In such circumstances, the 
Socialists are often denounced as being narrow and intolerant, 
or inconsistent and insincere. It is very easy to make such 
charges, and it is perhaps natural that they should be made. 
The slightest knowledge of the movement, however, is 
sufficient to discredit the charges. It is inconceivable that 
a great movement which is maintained by an incalculable 
amount of self-sacrifice should place the principles and 
ideals for which that sacrifice is made beneath mere party 
or personal consideration. The sincerity of the Socialists 
and the intellectual attainments of their leading exponents 
warrant us assuming that there must be serious and vital 
reasons for their exclusive attitude. 

Reasons for such refusal: The refusal of the Socialists 
to cooperate with non-Socialist reformers may be due to 
(1) the fact that the specific reforms they are asked to 
support are not in harmony with Socialist principles; (2) 
the fact that, while consistent with the Socialist program, 
and even taken from it, the specific reforms are not of them- 
selves sufficiently important to justify the Socialists in 
dropping the rest of their program for the time being in 
order to concentrate upon them; (3) the fact that the 
Socialists lack faith in those with whom they are asked to 
cooperate. 

A very brief consideration of these reasons will enable us 
to understand the Socialist point of view. Of the reforms 
which are not in accordance with Socialist principles we have 
excellent illustrations in the various measures proposed for 
the restriction of monopoly. It often happens that the 
indictment of the great oppressive monopolies by middle- 
class reformers is very similar to the indictment of the same 
monopolies by the Socialists. No Socialist agitator ever 
more bitterly arraigned the Steel Trust for its treatment 
of its employees than some of our middle-class reformers have 
done. But when the Socialist is asked to work for anti- 
trust legislation he must decline, for the very obvious reason 



334 ELEMENTS OF SOCIALISM 

that he believes monopoly to be an inevitable and necessary 
step towards Socialism. 

Of those reforms which are consistent with the Socialist 
program and included in it, but are advocated also by non- 
Socialists, woman's suffrage is a good illustration. Equal 
suffrage is a fundamental principle of Socialism. When 
limited suffrage for women is proposed, giving the vote to 
women who possess certain property qualifications, the 
Socialists oppose the measure, even where it is favored by 
the organized woman's suffrage movement. Such a measure 
is not in harmony with Socialist principles. When, as in the 
United States, the demand is for the extension of the suffrage 
to all women, the Socialists give the movement their hearty 
support. They hold demonstrations in favor of it, appear 
at legislative hearings on behalf of it, circulate petitions, 
and otherwise further the movement. Not only does the 
Socialist Party do these things in connection with its own 
propaganda, but it gladly and earnestly cooperates with the 
woman's suffrage organizations in similar activities. But 
if it should be asked to drop all the rest of its program for 
the time being, and to confine itself solely to agitation for 
woman's suffrage, it might very properly decline to do so, 
upon the ground that, important as the reform is, it is not 
important enough to warrant the proposed action. This 
does not mean, of course, that the Socialists must take the 
position indicated under any and all circumstances. In 
various countries the Socialists have at different times 
concentrated all their energies upon specific issues, especially 
the extension of the franchise, notably in Austria, Belgium 
and Sweden. Circumstances might arise which would justify 
the Socialists in concentrating all their energies upon the 
extension of the suffrage to women or any other measure. 
The point to be observed is that so long as they do not 
regard the particular reform as being important enough to 
warrant the adoption of such a policy, the Socialists are 
justified in refusing to do so. 

Concerning the third reason for refusing to cooperate 
with non-Socialist reformers, lack of faith in those with 
whom they are asked to cooperate, not much need be said. 
It is a common thing for capitalist parties to put into their 
platforms measures of reform, excellent in themselves, which 



SOCIALISM AND SOCIAL REFORM 335 

are intended to serve as bait to catch the unwary. After a 
great strike among the coal miners some years ago the Demo- 
cratic Party in the State of New York adopted as one of 
the planks in its platform government ownership and control 
of the coal mines. There were some persons who regarded 
that as a reason why the Socialists ought not to oppose the 
Democratic Party, but support it. They regarded the pro- 
posed reform as a very important "step in the direction of 
Socialism." Apart altogether from the inability of the 
Socialists to believe in the good faith of the Democrats, such 
a policy was impossible. It would have meant the demoral- 
ization of the Socialist Party. It would have meant, also, 
that the Socialists would have had to support a great many 
things in which they did not believe as well as the one thing 
in which they did believe. 

Essentials of Socialist reform: The Socialist reform pro- 
gram is distinguished from all other reform programs by 
two fundamental characteristics. The first of these is the 
interrelation of all the reform measures to one another. 
They are not separate and distinct reforms, each one offered 
as a panacea for a special social ill. They are all inter- 
dependent. The social reform program of Socialism does 
not consist of an aggregation of measures, separately devised 
and based upon different and conflicting principles, now 
collectivistic, now individualistic. Every one of its measures 
is consistent with all the others, and all are based upon 
one central idea. The second characteristic is that all the 
measures are frankly based upon the interest of the working 
class. The entire program has for its aim the strengthening 
of the workers as a class, economically and politically, in 
order that they may be able to establish the Socialist state. 



336 ELEMENTS OF SOCIALISM 

SUMMARY 

1. Socialists generally have from the first included immediate re- 
forms in their programs, but there has always been a minority opposed 
to reforms, and basing their hope of revolution upon the increasing 
misery of the proletariat. 

2. As the movement in any country becomes stronger there is an 
increasing tendency to advocate reforms and an increasing recognition 
of the value of parliamentary activity. 

3. The attitude of Socialist parties toward trade unionism is often 
characterized at first by a desire to control, and failing in this, by open 
hostility. In later stages the attitude tends to be that of recognition 
and desire for cooperation with the unions. 

4. The aim of all Socialist reform measures is the strengthening of the 
workers as a class, economically and politically. 

QUESTIONS 

1. Discuss the attitude of Marx and Engels toward reforms. 

2. What is the distinction between Revolutionism and Opportunism? 

3. What is the attitude of the extreme Revolutionist toward parlia- 
mentary activity? 

4. What changes have taken place in the tactics of the German 
Social Democracy since the early period of its history? 

5. Explain the relation of SociaFreform to the class struggle. 

6. How does the attitude of the British Socialists toward distributive 
cooperation differ from that of the Belgians? 

7. What has been the attitude of the Social Democrats in England 
toward the trade unions? 

8. What is the difference in attitude toward trade unions between 
the American Socialist and Socialist Labor Parties? 

9. Under what circumstances will Socialists work with non-Socialist 
reformers? 

10. Why do Socialists sometimes refuse to work with such reformers? 

Literature 

Commons, J. R. and others (editors), Documentary History of Amer- 
ican Industrial Society , Vol. V. 

Ely, R. T., The Labor Movement in America. 

Holyoake, G. J., History of Co operation , Vol. I. 

Hughan, Jessie W., American Socialism of the Present Day, Chap. 
XI-XIV inclusive. 

Kampffmeyer, Paul, Changes in the Theory and Tactics of the (German) 
Social Democracy. 

Marx, K., and Engels, F., The Communist Manifesto. 

Spargo, John, Karl Marx, His Life and Work, Chap. X. 

Webb, Sidney andBeatvice, History of Trade Unionism, Chap. I and II. 



CHAPTER XXIV 

THE REFORM PROGRAM OF SOCIALISM 



The common aim: In order that the workers "may seize 
every possible advantage that may strengthen them to gain 
complete control of the powers of government, and thereby 
the sooner establish the cooperative commonwealth," * the 
Socialist parties of all lands have adopted comprehensive 
programs of social and political reforms. Naturally these 
programs differ materially according to the conditions 
existing in the different countries, but they are all charac- 
terized by a general identity of aim and purpose. 

Suffrage: Modern Socialism is inseparable from political 
democracy. Foremost among the demands of all the Social- 
ists of the world are those for the abolition of all restrictions 
upon the franchise which places the working class at a dis- 
advantage. Some few Socialists, like Belfort Bax, the 
English Social Democrat, are opposed to woman's suffrage 
and vehemently deny that it is an essential principle of 
Socialism, but the contrary view is held by the vast majority 
of Socialists everywhere. In Europe the battle for universal 
manhood suffrage has taken a large place in the Socialist 
propaganda, and the fight is not yet wholly won. In the 
United States the Socialists have not been under the necessity 
of establishing manhood suffrage, since that reform was 
accomplished early in the history of the country. Proposals 
for the extension of the franchise to women upon equal 
terms with men, the abolition of poll taxes, through which 
the progressive disfranchisement of a large part of the 
working class in many states is being accomplished, and 
other similar measures are urged in the national and state 
programs of American Socialism. 

1 National Platform, Socialist Party of America, 1904. 

337 



338 ELEMENTS OF SOCIALISM 

The initiative , referendum and recall: Direct legislation, 
through the initiative and referendum, holds an important 
place in the reform program of nearly every Socialist party 
in the world. In England it does not appear in the program 
of the Independent Labor Party, but is given a prominent 
place in the program of the Social Democratic Party. On 
the other hand, it is opposed by the Fabian Society, which 
in this respect holds a unique position. The position of the 
Fabians is set forth in a resolution presented to the Inter- 
national Socialist Congress in 1896. They oppose the ini- 
tiative and referendum because they believe that the masses 
can never be made sufficiently familiar with the "dry details" 
of legislative and administrative reforms to vote intelligently 
upon them; that while theoretically democratic, direct 
legislation is in practice reactionary, and urge that the fact 
that leading anti-Socialists in England have advocated the 
adoption of the referendum as a means of fighting Socialism 
is a good reason why Socialists should oppose it. Broadly 
speaking, the opposition of the Fabians to direct legislation 
may be said to arise from their conception of Socialism as 
a better organization of industry, rather than as the emanci- 
pation of the working class. They do not accept the doctrine 
of the class struggle. By Socialists generally direct legislation 
is favored because it will help the working class to establish 
its rule. It is not intended to supplant representative par- 
liamentary government, but to supplement it. The right 
to initiate legislation, to consider legislation before it becomes 
law, and to recall elected representatives and officials are 
fundamental principles of democracy. 

Proportional representation and second ballot: In every 
country we find the Socialists fighting for proportional 
representation. True representative parliamentary govern- 
ment is not possible where the parliament does not epitomize 
the opinion of the population. In the Congress of the United 
States we have approximately one representative for every 
35,000 voters. But with over 600,000 votes the Socialists 
elected only one representative to the Sixty-second Congress. 
The Prohibition Party has participated in every national 
election held during the past thirty years, polling from 130,- 
000 to 270,000 votes, but has never had a single Congres- 
sional representative. The injustice of this is manifest. 



THE REFORM PROGRAM OF SOCIALISM 339 

In Finland, Sweden and Belgium the Socialists have suc- 
ceeded in bringing about proportional representation. It 
should perhaps be said that no particular scheme of pro- 
portional representation has been advocated by the Socialist 
parties. 

Closely allied to proportional representation is the second 
ballot, which is advocated in the Socialist program of nearly 
every country in which the principle is not already estab- 
lished. Where a bare plurality of votes suffices to elect 
parliamentary representatives and public officials, it fre- 
quently happens that the candidates elected represent only 
a minority of the voters in their respective constituencies. 
Let us take the case of an election in which there are four 
candidates for the legislature — a Republican, a Democrat, 
a Reform candidate and a Socialist. Many persons avowedly 
sympathetic to Socialism, who would vote for the Socialist 
candidate if they did not regard his candidature as hopeless, 
vote for that one of the other candidates whom they regard 
as the more progressive of the non-Socialist candidates. 
In this manner the present system of election by plurality 
vote leads many voters to compromise their principles and 
the vote reflects that compromise rather than the real desire 
of the people. In Germany, Belgium and several other 
European countries this difficulty is met by the second ballot. 
Let us suppose that in our election the vote results as 
follows: 

Republican 1800 

Democrat 1700 

Socialist 1100 

Reform 800 

5400 

With one-third of the vote the Republican is elected, 
although two-thirds of the voters opposed him. Under the 
second ballot the Socialist and Reform candidates would 
drop out and there would be a re-ballot with the Republican 
and the Democrat as candidates. In that case enough of 
those who voted for the Socialist and Reform candidates 
might vote for the Democrat to give him an absolute majority. 
Undoubtedly the second ballot is of great advantage to the 
Socialist and other radical parties in those countries where 



340 ELEMENTS OF SOCIALISM 

it is established. Some English and American Socialists 
have advocated preferential voting instead of the second 
ballot. That is, that each voter be required to vote upon 
every candidate for the office to which an election is held, 
numbering each in the order of his choice, as first choice, 
second choice, and so on. 

Abolition of the Senate: Among the political reforms 
commonly found in the programs of European Socialist 
parties the payment from the public treasury of the cost of 
holding elections and of salaries to parliamentary repre- 
sentatives, are reforms which, like manhood suffrage, have 
long since been accomplished in the United States. The 
abolition of the Senate, however, is a reform which American 
Socialists demand in common with the Socialists of several 
countries. Thus we find the British Social Democratic 
Party, the Belgian Labor Party, the French Socialist Party 
and several other Socialist parties, demanding the abolition 
of the Senate, or, in England, the House of Lords. In 
Denmark and Belgium the Socialists have obtained repre- 
sentation in the Senate, but that does not blind them to 
the fact that the Senate is a body designed to give power to 
the master class. In almost every country, the upper house 
of parliament represents the privileged classes. The Senate 
of the United States was deliberately designed to represent 
wealth and social position. It was intended by the aristo- 
cratic constitutional convention to "protect the minority 
of the opulent against the majority." 1 This purpose was 
attained by providing for indirect election of Senators, long 
terms of office and an equal number of Senators from each 
state, regardless of population. In place of the Senate the 
Socialists would have the popular optional referendum. 



II 

The administration of justice: Reforms in the administra- 
tion of justice and in the judicial system as a whole have an 
important place in the programs of international Socialism. 
There are few Socialist parties which do not lay stress upon 
the necessity of making the administration of justice free 

1 Madison, Elliot's Debates, Vol. I, p. 450. 



THE REFORM PROGRAM OF SOCIALISM 341 

by abolishing all court fees and making attorneys public 
officials paid by the State. However impartial the law itself 
may be at its best, it is obvious that a rich man to whom 
court fees are of no importance, and who can afford to engage 
the most eminent counsel, has an immense advantage over 
a poorer litigant. In practice, therefore, there is ample 
justification for the plaint that "there is one law for the rich 
and another for the poor." Wherever the Socialists have 
had the power to do so they have opened free municipal 
bureaus of legal advice as a step toward the establishment of 
a completely free system of judicial administration. 

In nearly every country, also, the Socialists demand that 
all judges be popularly elected, and, like ail other officials, 
subject to recall. The class bias of appointive judges is 
notorious, and it is not easy to see why the interpretation 
of the laws of any country should be not responsive to the 
people, the makers of the law in any ultimate analysis of 
democracy. In many states in this country the judges are 
elected by the people and the Socialists would apply the 
elective principle to all judicial offices. 

The judicial veto : This reform carries with it the abolition 
of the judicial veto, which is neither more nor less than a 
power to nullify the legislative acts of the elected parliament. 
In the United States this question assumes greater importance 
than anywhere else in the world and has led to the adoption 
by the Socialist Party of a demand for the abolition of the 
power of the Supreme Court to pass upon the constitutionality 
of laws. The power to abrogate any act of Congress ought 
to be vested only in the people themselves through popular 
referendum and their elected representatives in Congress. 
It may be said that in this demand the Socialists are return- 
ing to the principles upon which the nation itself was founded. 
The Constitution of the United States does not give the 
Supreme Court the power to nullify legislation. It was 
assumed by the court under the rule of Chief Justice Marshall, 
and has become an accepted fact in our law. Thus the 
Supreme Court has become the ultimate legislative authority, 
reading into legislation important principles which Congress 
itself specifically refuses to include in the legislation when 
it is being formulated. In conformity with this Socialist 
demand, the only representative of the party in the Sixty- 



342 ELEMENTS OF SOCIALISM 

second Congress included in a measure providing for old 
age pensions a clause expressly forbidding the Supreme Court 
to pass upon its constitutionality. Another reform of 
judicial procedure of far greater significance in the United 
States than elsewhere is the restriction of the power to issue 
injunctions in labor disputes, from which some of the worst 
abuses of our judicial system have arisen. 

Ill 

The protection of labor: When the necessary allowances 
have been made for the differences of industrial conditions 
and political and social development of the countries there 
is a remarkable and suggestive similarity in the practical 
proposals of the Socialist parties for the protection of labor. 
The class struggle involves pretty much the same needs in 
monarchical Germany as in republican France; in the United 
States as in Belgium or Italy. Thus we find substantially 
the same demands made in various countries; all want the 
legal prohibition of child labor, regulation of the hours of 
labor, adequate factory inspection, freedom of trade union 
combination, relief work for the unemployed, and insurance 
against accident, sickness, unemployment and old age. 

American Socialists want the prohibition of the employ- 
ment of children under sixteen years. The Belgian Socialists 
would forbid all employment to children under fourteen 
and permit only half-time employment from fourteen to 
eighteen. Socialists realize the enormous injury which child 
labor inflicts upon the working class, and in every country 
they are to be found in the vanguard of the fight against it. 
They are not blind to the fact that the labor of the child 
is often caused by poverty and that to forbid the employ- 
ment of the child may lead to greater poverty and suffering. 
They contend, however, that the remedy for poverty is not 
child labor. It would be far better for the State to assume 
the cost of maintaining children than to permit their young 
lives to be ruthlessly exploited for profit. Fix minimum 
wage rates, provide work for the unemployed or insure the 
workers against it, pension the sick, the aged, the widow 
and the orphan, but do not destroy the life of the child, 
say the Socialists in all lands. 



THE REFORM PROGRAM OF SOCIALISM 343 

Most Socialist parties demand the enactment of legisla- 
tion establishing eight hours as the maximum work-day, 
providing for a rest period of not less than a day and a half, 
thirty-six consecutive hours, in each week, forbidding the 
employment of women and girls in occupations especially 
injurious to females, and confining night work to the mini- 
mum absolutely necessary. American Socialists make their 
demand for the reduction of hours of labor more general, 
and demand "shortening the work-day in keeping with the 
increased productiveness of machinery." In several coun- 
tries the Socialist parties demand the prohibition of the 
employment of women for a given period before and after 
childbirth, generally six weeks. American Socialists have 
made no declaration upon this important matter, but it is 
significant that the attempt to pass such a law in Massa- 
chusetts in 1910 was the work of Socialists. 

Agricultural laborers: It is not easy to see how a measure 
like the eight-hour law is to be applied to agricultural labor 
so long as agriculture retains i-ts present form. The Social- 
ists in Belgium frankly face this difficulty and limit the 
application of the eight-hour work-day, and other similar 
reforms, to the "industrial workers." The French Socialists, 
on the other hand, in 1902 specifically applied its measures 
for the regulation of the hours of labor to "labor in industry, 
commerce and agriculture. " Without making a definite 
statement upon the point, American Socialists have largely 
followed the example of the Belgians, and, by implication 
at least, regarded agricultural labor as outside the scope of 
some of the laws proposed for the regulation of the hours 
of labor. Like the Belgians, they have formulated special 
programs for farmers, including such reforms as the estab- 
lishment of grain elevators and storage warehouses by the 
State; separation of the Board of Agriculture from politics, 
making it an elective body, the farmers themselves to be 
the electors; State insurance against diseases of animals 
and plants, insect pests, hail, flood, storm and fire, and State 
assistance to cooperative associations of farmers for the 
purchase of seed, fertilizer, implements and machinery and 
for working the land and marketing produce. This is a new 
development in American Socialist policy and the "Farmer's 
Program" is as yet crude and ill-developed. 



344 ELEMENTS OF SOCIALISM 

State insurance: In almost every industrial country 
except the United States, something has been done to insure 
the workers against poverty as a result of sickness, accident, 
unemployment or old age. In Austria, where they have 
compulsory insurance against sickness and accident, the 
Socialists aim to reform the system to liberalize it, and to 
extend the insurance to cover unemployment and old age. 
In Germany, where they have insurance against sickness, 
accident and old age, the Socialists aim to include insurance 
against unemployment in the scheme, and to further democ- 
ratize its administration. In the United States there is no 
legislation, state or national, providing for the insurance of 
the workers against sickness or accident or loss of employ- 
ment, no provision for old age, except for the veterans of 
the wars. 

The Socialist Party demands that the enormous risks of 
modern industry be borne by the nation instead of by the 
individual workers and their families. The workers them- 
selves are quite powerless to make adequate provision against 
sickness, accident and death, to say nothing of unemploy- 
ment. By immense sacrifices, through trade unions, fra- 
ternal insurance societies and private insurance companies 
the workers made heroic efforts to insure their families 
against the worst results of prolonged illness, accident and 
death. This can at best be done very inadequately, and many 
of their attempts subject them to further exploitation by the 
insurance companies, whose charges are notoriously exorbi- 
tant. Even if these disadvantages did not exist, the Socialist 
view is that the risks incidental to the production of the 
national wealth would be socially borne, so far as that is 
possible. 

IV 

Public health : In their programs and their practical work, 
the Socialists of all countries have been distinguished from 
all other political parties by the consistency and intelligence 
with which they have recognized the social importance of 
caring for the health of the people. It has been said that 
every advance in the Socialist movement in Europe has 
been marked by a lowering of the death-rate. The fact 



THE REFORM PROGRAM OF SOCIALISM 345 

that the working class furnishes most of the victims of 
preventable disease has forced the Socialists to pay special 
attention to the subject. Thus, in France, Germany, 
Belgium and Italy, among other countries, the Socialists 
have done much to prevent excessive infantile mortality by 
establishing municipal creches, milk depots, and, in some 
cases, by pensioning nursing mothers and thus enabling 
them to remain at home with their babies. They have cared 
for the health of school children by establishing open air 
schools in the country or at the sea-side for sickly children; 
maintaining free dental clinics; providing free meals, or 
meals at cost, for children in schools; developing the system 
of medical inspection in schools and so on. In several 
countries the Socialists have, in the municipalities which 
they control, gone far toward the practical realization of 
the principle of free medical attendance, midwifery and 
medicine, contained in many of the national programs. 
Sanatoria and convalescent homes for the workers have been 
established by many municipalities under Socialist influence. 
The establishment of free medical service, making physicians 
and surgeons public servants, is generally advocated by 
Socialists all over the world, though it is not specifically 
mentioned in the program of the Socialist Party of America, 
which confines itself to the general demand of "further 
measures" for the conservation of health, and the one specific 
demand for the creation of a national department of public 
health and hygiene. 

The temperance problem : Like disease, drunkenness and 
its concomitant evils affect most seriously the working class. 
Socialists everywhere recognize the ravages of intemperance 
and in some countries have done a great deal to stop its 
progress. The Socialists in' most European countries have 
during the past few years waged war upon alcoholism as one 
of the things tending to unfit the working class for effective 
resistance to the master class and for the efficient admin- 
istration of public affairs. So effective has the stand of the 
Socialists upon this question been that it is commonly said 
in Europe that the capitalist parties could not exist but for the 
saloons. In many of the leading countries of Europe there 
are Socialist temperance societies. At the seventh Inter- 
national Anti-Alcoholic Congress in Paris, one of the prin- 



346 ELEMENTS OF SOCIALISM 

cipal addresses was made by Emile Vandervelde, the Belgian 
Socialist leader. 

But there is no common legislative policy for dealing with 
this problem upon which all the Socialist parties unite. 
Perhaps this is due in part to the fact that it is a com- 
paratively recent development of Socialist policy to deal 
with it at all. In 1903, under the leadership of Victor Adler, 
the congress of the Austrian party adopted a resolution 
declaring that the drinking habits of the people constitute 
a serious obstacle to the Socialist movement and pointing 
to the improvement of economic conditions and the educa- 
tion of the people concerning the injurious effects of alcohol- 
ism as the most effective means of combating the evil. 
It urged all its members to discourage drinking, to forbid the 
sale of intoxicants in Socialist clubs, and to assist the tem- 
perance societies. In 1907 at the Essen Congress, the 
German party adopted a resolution on the subject of the 
evils of alcoholism. The resolution pointed out the anti- 
social conditions which are primarily responsible for intem- 
perance among the workers, and urged the removal of these, 
rather than restrictive legislation. In the same year the 
Belgian party congress passed a much stronger resolution 
on the subject and instituted a bureau for the purpose of 
carrying on an educational campaign against intemperance. 
Similar resolutions have been adopted by the party con- 
gresses in several other countries, including England — by 
the Independent Labor Party — and the United States. The 
American resolution declares "any excessive use of liquor by 
members of the working class is a serious obstacle . . . 
since it impairs the vigor of the fighters in the political and 
economic struggle, and we urge the members of the working 
class to avoid any indulgence that might hinder the progress 
of the movement for their emancipation. . . . We do not 
believe that the evils of alcoholism can be cured by an 
extension of the police powers of the capitalist State. Alco- 
holism is a disease of which capitalism is the chief cause, 
and the remedy lies rather in doing away with the under- 
feeding, over-work and over-worry which result from the 
wage system. " 

In practical politics the Socialist attitude upon the sub- 
ject varies greatly in different countries. In Norway and 



THE REFORM PROGRAM OF SOCIALISM 347 

Sweden the Socialists support the Gothenburg system, or 
some modification of it. In Finland they favor absolute 
prohibition. In Belgium they demand that the manufacture 
and sale of alcoholic drinks be made a State monopoly. 
In England Socialists generally favor the municipalization 
of the entire liquor traffic. American Socialists have taken 
no definite stand. All Socialists accept the principle of local 
option and probably a majority of American Socialists 
believe in some form of collective ownership and manage- 
ment of the entire liquor traffic. 



Taxation: In all countries the Socialist parties oppose 
practically all forms of indirect taxation. Thus the German 
Social Democracy demands the abolition of all indirect 
taxes, customs and duties on the ground that they "sacrifice 
the interests of the whole community to the interests of a 
favtfred minority; " and the Belgian Labor Party demands 
"abolition of indirect taxes, especially taxes on food and 
customs tariffs. " The French Socialist Party, on the other 
hand, while opposing taxes on food and customs duties, and 
such forms of direct taxation as the taxation of small plots 
of land and certain small businesses, seems to favor certain 
forms of indirect taxation by empowering the State "to seek 
a part of the revenue which it requires from certain monopo- 
lies. " Upon the positive side, all the Socialist parties advo- 
cate the progressive taxation of incomes and inheritances. 
In the program of the American Socialist Party the sugges- 
tion is made that the taxation of inheritances should be 
graduated in accordance with the nearness of kinship of the 
legatee as well as in accordance with the amount. The Bel- 
gian program provides that, except in case of gifts to works 
of public utility, gifts of property between the living should 
also be taxed upon the same basis as testamentary gifts. 
The object of this provision is to prevent the evasion of the 
taxes upon inheritances by the simple method of "giving" 
property during the lifetime of the owner to those who 
would otherwise not receive it until after his death. 

The taxation of land valued for local purposes is generally 



348 ELEMENTS OF SOCIALISM 

advocated by Socialist parties. This measure was advocated 
in the Communist Manifesto, long before the rise of the 
Henry George Single Tax school. While fundamentally 
differing from the individualistic philosophy of this school, 
and regarding the Single Tax as wholly inadequate when con- 
sidered as a solution of our social problem, the Socialists 
fully believe in absorbing by means of taxation the full 
rental value of land. But even if the average wage worker 
could get a factory site free he would not be able to set 
up in business upon his own account with any chance of 
success. He could not afford the costly equipment without 
which successful competition with the great capitalists 
would be impossible. To the Socialist, then, the taxation 
of land values is only an item in a comprehensive program, 
and not a solution of the social problem. 

Collective ownership : The collective ownership and man- 
agement of railroads, telegraphs, telephones, steamship lines 
and all other means of social transportation; of land that is 
used for the purpose of exploiting labor; of mines, quarries, 
oil wells, forests and water power, and of industries which 
can be so owned and managed with advantage to the com- 
munity are demands which are found in every Socialist 
program in the world. In some instances one item or another 
in the foregoing list may be omitted, as in England, where 
the telegraph service has long been nationalized, or Belgium, 
where the railways have always been owned by the nation, 
but otherwise the list is a fair composite of the programs of 
Socialism in all the countries. The reasons for collective 
ownership, the line of demarkation between social and private 
property and the chief objections to collective ownership 
are discussed in other chapters. The question of method 
alone concerns us here: how do the Socialists propose 
society shall acquire the means of production and exchange 
which are to be collectively owned and administered? Do 
they advocate confiscation or purchase? 

Means of Socialization: It will perhaps help us to arrive 
at a proper answer to these questions if we made a sharp 
distinction between Socialism in the propagandist stage and 
Socialism in the constructive stage. So long as they are 
engaged simply in urging the general principle of collective 
ownership of the means of production and exchange and its 



THE REFORM PROGRAM OF SOCIALISM 349 

advantages, the Socialists are justified in meeting all ques- 
tions concerning the methods of obtaining possession of 
capitalist industry with the answer: "Let us first decide 
whether we want collective ownership; if we do we shall 
devise the best method of bringing it about that we can." 
When that stage has been passed, and they are called upon 
to formulate plans for the realization of the principle of 
collective ownership, the Socialists have to consider the 
circumstances existing in each particular case. They are 
not called upon to socialize all the means of production and 
exchange at once, but a single branch of industry in a par- 
ticular place, or a single public service. The proposal is to 
municipalize this lighting plant or that telephone service, 
or to nationalize the railways or a particular industry, as 
the case may be. 

Broadly speaking, all the methods of bringing about 
collective ownership ultimately rest upon competition, con- 
fiscation or compensation. That is to say, either society 
must enter into competition with the capitalists and com- 
pete them out of existence in much the same manner as the 
large corporation crushes the small manufacturer by com- 
petition, or it must take what it needs by force, without 
payment, or it must purchase what it needs. Socialists 
are not committed to any one of these principles, nor are 
they precluded from adopting either or all of them. 

The competitive method : Tired of the extortion and poor 
service of a public service corporation, a gas company, for 
example, the citizens of a particular municipality decide 
that they want a municipally-owned and -operated lighting 
plant. The Socialists, elected upon this issue, proceed to 
the task of carrying out the will of the people. Either because 
the price asked by the company is too high, or because they 
find the plant to be antiquated and inadequate, they decide 
against purchase. To confiscate the plant entirely is out 
of the question, first, because the citizens would not tolerate 
it, and second, because the laws of the State or the nation 
forbid. The Socialist administration decides, therefore, to 
erect a new plant, or perhaps to install an electric lighting 
system in place of gas. The company now finds that the 
profitable contracts for public lighting are taken from it, 
and that the publicly owned electric service is so generally 



350 ELEMENTS OF SOCIALISM 

used by the citizens that the manufacture of gas is no longer 
profitable, and that the value of the plant has been destroyed 
by competition. That is one method, applicable in many 
instances, but quite inapplicable in others. While it might 
be the best method imaginable in the case of a shoe factory, 
it might not be at all a good method in the case of a water- 
supply system. To build parallel railway lines, for example, 
would, in most cases, be a great waste. 

Confiscation: It is undoubtedly true that individual So- 
cialist speakers and writers have advocated confiscation. 
It would be strange if it were otherwise, if reckless, visionary 
and impracticable theories and methods were not advocated 
from time to time. But, here again, we must judge the move- 
ment by its mass, not by its exceptions; by its sanest rather 
than by its most foolish advocates. Marx and Engels 
personally favored purchase rather than confiscation. 
Engels wrote in 1894: "We do not at all consider the indem- 
nification of the proprietors as an impossibility, whatever 
may be the circumstances. How many times has not Karl 
Marx expressed to me the opinion that if we could buy up 
the whole crowd it would really be the cheapest way of 
relieving ourselves of them." 1 There is not a single Socialist 
writer of recognized authority in the international movement 
who does not agree that there is nothing in the theory of 
modern Socialism which precludes the possibility of paying 
the owners of property for whatever is taken from them. 
Strangely enough, the English Fabian Society seems to be 
the only important Socialist body in the world which has 
declared against the principle of compensation, and even it 
provides for "such relief to expropriated individuals as may 
seem fit to the community." 2 

That Marx was right in regarding purchase as a cheaper 
method than forcible confiscation can hardly be doubted 
by anyone who has considered the manner in which chat- 
tel slavery in this country was abolished. Leaving out of 
account the loss of life, the sectional bitterness resulting 
from the Civil War, and the disastrous check to the economic 
development of the South, the money cost of the abolition 
of slavery, including war expenses, pensions and the destruc- 

1 Quoted by Vandervelde, Collectivism, p. 155. 

9 Basis of the Fabian Society. See Ensor, Modern Socialism, p. 359. 






THE REFORM PROGRAM OF SOCIALISM 351 

tion of property, far exceeded the money value of the slaves. 
Everywhere in actual practice we find the Socialists moving 
along the lines of least resistance, and it is safe to say that 
Jules Guesde was right when he asserted in the French 
Chamber of Deputies that if violent measures are ever 
resorted to, the Socialists wall not be responsible, that if the 
decision is left to the Socialists the transformation will be 
a peaceful one accompanied with a minimum of hardship 
to the master class. 

Liebknecht's view: Perhaps the view most generally held 
is that expressed by Wilhelm Liebknecht in the following 
brave and generous words: 

"Even those who enjoy privileges and monopolies ought 
to be made to understand that we do not propose to adopt 
any sudden or violent measures against those whose position 
is now sanctioned by law, and that we are resolved, in the 
interests of a peaceful and harmonious evolution, to bring 
about the transition from legal injustice to legal justice 
with the greatest possible consideration for the individuals 
who are now privileged monopolists. 

"We recognize that it would be unjust to hold those who 
have built up a privileged situation for themselves on the 
basis of bad legislation personally responsible for that bad 
legislation, and to punish them personally. 

"We especially state that in our own opinion it is the duty 
of the State to give an indemnity to those whose interests will be 
injured by the necessary abolition of laws contrary to the 
common good, in so far as this indemnity is consistent with 
the interests of the nation as a whole." 1 

Compensation: Accepting the view that in the vast 
majority of cases, the transformation of capitalist property 
to social property will be peacefully accomplished, the expro- 
priated owners being compensated, we are at once confronted 
with a new difficulty. If bonds are issued for the purchase 
of the properties as they are socialized, will not unearned 
incomes continue to exist? Will not all the heavy stock- 
holders simply become rich bondholders? 

To these questions an affirmative answer must be given. 
Temporarily, at least, these conditions would exist. Kautsky 
and some other Socialist writers in Europe and America 
l Cf. Jaures, Studies in Socialism, p. 89. 



352 ELEMENTS OF SOCIALISM 

have frankly faced this difficulty. They suggest (1) that 
the bonds might be non-interest bearing; (2) that over and 
above the amount expended by the State in redeeming 
its bonds, there would be a surplus to be employed for the 
extension of socialization or any other purpose decided upon 
by the people; (3) that when a few of the important indus- 
tries have been taken over the bondholders will find it 
difficult to invest their surplus incomes profitably; (4) that 
by means of a graduated income tax and an inheritance tax 
all such unearned incomes could be eliminated within a 
reasonable period, without inflicting injury upon any indi- 
vidual. Taxation is of course a form of confiscation, but we 
have long been accustomed to it, and it makes it possible 
for the process of confiscation to be stretched over such a 
long period of time as to make it easy and almost unnotice- 
able. 

Other reforms: We have briefly sketched the main out- 
lines of the reform program of present-day Socialism, dealing 
more particularly with those which are distinctive and char- 
acteristic of the movement, rather than with those reforms 
which are more commonly advocated by all liberal-minded 
citizens. Socialists everywhere stand for the conservation 
of natural resources; for international arbitration; for de- 
centralization and a large measure of municipal autonomy; 
for the complete democratization of education, making all 
education from the kindergarten to the university free; 
for the freedom of the press, of assemblage and religious 
association; and all other reforms essential to the realiza- 
tion of political and industrial democracy. 



THE REFORM PROGRAM OF SOCIALISM 353 

SUMMARY 

1. Socialists desire to make political democracy a reality by establish- 
ing universal suffrage, direct legislation and proportional representa- 
tion, and by abolishing the upper houses of parliaments. 

2. They demand the free administration of justice and the abolition 
of the powers of the courts which protect class privilege. 

3. They demand State protection for the working class by abolish- 
ing child labor, restricting the working period and establishing State 
insurance 

4. They desire the extension of public health legislation, and are 
generally interested in the promotion of temperance. 

5. They wish to substitute direct for indirect taxation, and to bring 
about the collective ownership and operation of the principal means of 
production and exchange. They generally favor some form of compen- 
sation to the expropriated owners of industry. 

QUESTIONS 

1. Why do Socialists generally favor the initiative and referendum? 

2. What are the advantages of proportional representation? Of 
the second ballot? 

3. Why do Socialists wish to abolish the Senate? 

4. How does the present judicial system uphold class rule? 

5. What is the Socialist argument for State insurance? 

6. Compare the positions of the various Socialist parties on the sub- 
ject of alcoholism. 

7. Why do Socialists oppose indirect taxation? 

8. What are the possible methods of obtaining possession of industry? 

9. What are the advantages of the method of compensation? 

Literature 
Ensor, R. C. K, Modern Socialism, Chaps. XXII-XXVIIL 
Hillquit, M., Socialism in Theory and Practice, Part II. 
Hunter, R., Socialists at Work, Chaps. VI- VIII. 
Jaures, Jean, Studies in Socialism, Chaps. VII-X. 
Kautsky, K., Das Erfurter Program (tr. as The Class Struggle). 
Liebknecht, W., Socialism, What it is and What it Seeks to Accom- 
plish. 

Snowden, Philip , Socialism and the Drink Question. 
Spargo, John, Socialism (Revised Edition) Chaps. IX-X. 



CHAPTER XXV 

SOME OBJECTIONS TO SOCIALISM CONSIDERED 

The objections: A survey of the most important anti- 
Socialist literature of the past twenty-five years reveals 
the existence of a large body of criticism and objection. 
We may conveniently classify this body of criticism and objec- 
tion into two main divisions, the first consisting of philo- 
sophical and technical criticisms of the theories of Social- 
ism, and the second of objections and criticisms directed 
against the movement and program of Socialism. The former 
have been sufficiently considered in the text: we shall not 
further discuss them, therefore, but confine ourselves to the 
practical objections. 

The most important of these objections to Socialism are: 
(1) that it aims at the abolition of all forms of private prop- 
erty; (2) that it is a vain attempt to make all men equal, 
which is impossible; (3) that it would reduce all to a dead 
level; (4) that it would unjustly reward equally the lazy 
and the industrious; (5) that it involves spoliation and 
confiscation; (6) that it would make the individual the slave 
of the State; (7) that it aims at the destruction of the 
monogamous family and its substitution by "Free Love"; 
(8) that it is based upon degrading selfishness and crass 
materialism; (9) that it is too altruistic, too noble an ideal 
for imperfect human beings to attain; (10) that it is an 
attempt to do by sudden revolution what can only be done 
by evolution; (11) that it is a "cut and dried scheme"; (12) 
that it is a negative criticism merely and has no plan; (13) 
that men cannot be made good by legislation; (14) that it 
has never been tried; (15) that it has been tried and failed; 
(16) that the vast increase in public ownership would lead 
to a corresponding increase in corruption and graft; (17) 
that it is identical with Anarchism; (18) that it would 
involve an immense amount of bureaucratic government; 

354 



SOME OBJECTIONS TO SOCIALISM CONSIDERED 355 

(19) that it is opposed to all forms of religion; (20) that it 
would not provide an effective incentive to insure further 
progress; (21) that it would destroy art; (22) that it is 
against human nature. 

Each of these objections is commonly found in anti-Social- 
ist literature. It will be observed that some of them flatly 
contradict others. Some of them, therefore, must be invalid. 
Socialism may be condemned because it is based upon a 
low order of selfishness, but it cannot also be logically con- 
demned because it is based upon an impossible altruism. 
It may be criticised because it submits no plan or scheme 
for the future organization of society, but it cannot be 
also condemned because it is a "cut and dried plan." Yet 
it is not at all uncommon for these contradictory objections 
to be made by the same persons. 

Many of the objections already dealt with: The reader 
who has read the preceding chapters with a reasonable amount 
of care and attention will recognize the fact that a majority 
of the objections have been dealt with, either directly or 
by implication. In some instances, as, for example, the 
objection that Socialism aims at the abolition of the mono- 
gamic family, we have dealt with the matter specifically; 
in other instances, as, for example, the objection that 
Socialism aims to change society through a sudden revolu- 
tion, the subject has been sufficiently covered by the dis- 
cussion of the fundamental principle of Socialism as a theory 
of social evolution. With one or two exceptions, the entire 
list of objections has been dealt with to some extent, directly 
or indirectly, but a few of the objections deserve a more 
careful consideration. We shall confine the present dis- 
cussion to these. 

(1) Graft and business: The idea that graft is more 
general in publicly owned and managed enterprises than in 
ordinary commercial business is based upon a complete 
misconception. Graft in public business is more readily 
detected and more generally exposed than graft in ordinary 
commercial life. There are more voluntary detectives. 
The opponents of a man or political party in office are 
usually anxious to discover evidence of corrupt dealing to 
be used against the man or party in political campaigns. 
There is far greater publicity of graft in public business than 



356 ELEMENTS OF SOCIALISM 

of graft in private business, and there is danger that we 
come to regard graft as practically synonymous with public 
business enterprise. 

It is probable that there is far less graft in public business 
on an average than in private business, dollar for dollar. 
In other words, in public business to the value of a million 
dollars there will generally be found less graft and pecula- 
tion than in private business of an equal amount. The fact 
is that ordinary business life is notoriously honeycombed 
with graft. The foreman in a factory grafts upon the wage- 
earners under him and takes weekly "gifts" from them. 
The superintendent of the factory takes bigger gifts from 
those to whom he gives the orders for machinery, raw mate- 
rials and other supplies for the factory. The directors of the 
corporation owning the factory make contracts on behalf 
of the company from which they reap extraordinary advan- 
tages, or make sinecures for their relatives. The buyers 
for our great mercantile houses receive "presents" and 
"courtesies" and "commissions" to which the word graft 
may be fairly applied. The same may be said of the 
managers of the advertising departments of the railroad 
companies, department stores, and other large advertisers. 
Newspaper publishers and editors are bribed by large 
advertising contracts. In a word, there is hardly a branch 
of present-day business in which graft is not prevalent. 

Let us admit that where a city owns its street railways 
there will be a lot of graft in the form of petty peculations, 
commissions on contracts for supplies, padding the payrolls 
by creating useless jobs in order to reward political services, 
and so on. When we have admitted so much, it remains 
to be said that all these things take place where the street 
railways are owned by capitalist corporations to an even 
larger extent. Again and again managers of public service 
corporations have admitted that they dared not refuse 
employment to men sent to them by political bosses. 

Source of graft in public business : Graft in public busi- 
ness, apart from petty stealing, is almost invariably in the 
interest of some private business. It is the private business 
which flourishes through graft. Take the United States 
postal service as an example. In addition to paying for 
the transportation of mails a rate far in excess of the rate 



SOME OBJECTIONS TO SOCIALISM CONSIDERED 357 

charged to the express companies, the government pays 
an annual rent for each car which far exceeds the cost of the 
construction of the car, notwithstanding the fact that the 
average life of a mail car is more than ten years, and the 
further fact that no such rental is paid by the express 
companies. The graft in the postal system about which 
so much has been written is probably less than that which 
might be found in any industrial corporations doing an equal 
amount of business. Moreover, it has its roots in private 
business. The remedy lies, not in turning the postal system 
over to capitalistic enterprise, but in eliminating the private 
predatory interests. The railroad graft would be wiped out 
by applying the principle of collective ownership to the 
railroads. Graft might then find its most important centre 
in the business of supplying the railroads with coal, steel 
rails, engines, and other supplies. Again the remedy would 
lie in the further extension of public ownership and control 
to cover these things. 

Political corruption: The source of political corruption 
is always private business and never public business. At 
the national capital and most of the State capitals "lobbies" 
are maintained to foster certain interests. What interests 
are they? Always the interests of capitalistic business, 
never of public business. No city treasury ever has to 
provide for a legislative corruption fund, as our railroad, 
express and insurance companies have always done. When 
legislators are bribed it is always by those who are seeking 
to make profit through the adoption of favorable legisla- 
tion or through the defeat of unfavorable legislation. Mr. 
Lincoln Steffens tells of $50,000 being paid for the vote of 
a municipal councillor in St. Louis and of numerous other 
examples of corruption, all of which were due to the efforts 
of a few men to make enormous profits at the expense of the 
rest of the community. Bribes may be direct — that is the 
old, crude way — or they may be indirect and take the form 
of large fees or salaries for nominal services, or of friendly 
offers to "invest" a few hundred dollars with the assurance 
of many thousands of dollars profit, and so on. 

Graft and corruption, then, arise from the capitalist 
exploitation of public necessities. "Socialism implies (a) 
widespread public interest and criticism, fatal to graft; (6) 



358 ELEMENTS OF SOCIALISM 

the overthrow of that class interest which produces graft; 
(c) the end of that private business which flourishes parasiti- 
cally through the medium of graft and the plunder of the 
public treasuries." 1 

(2) Socialism and Anarchism: The Socialist movement is 
the greatest organized opposing force to Anarchism in the 
world. It is not an accident that in those countries where 
Socialism is strongest Anarchism is weakest, and vice versa. 
Both Socialism and Anarchism proceed from a criticism of 
the existing social order, and there is much similarity in 
their arraignment. They equally condemn the capitalist 
system on account of the poverty and vice, the misery and 
degradation which result from it. But at this point the 
Anarchist and the Socialist part company, and assume utterly 
irreconcilable positions. Socialism, as the word implies, 
is based upon the fundamental idea of social interest and 
responsibility, Anarchism on the opposite idea of individual 
interest and responsibility. Socialism regards society as 
supreme, Anarchism regards the individual as supreme. 
The Anarchist regards society as merely an aggregation of 
individuals, the Socialist regards society as something more, 
just as a house is something more than an aggregation of 
bricks and mortar. The Anarchist believes that society 
cannot rightly do what the individual cannot rightly do, 
and that as no individual can rightly control another indi- 
vidual, society cannot rightly control the actions of any 
individual. The Socialist holds that this is not the doctrine 
of liberty, but of tyranny; that it places the will of a single 
individual above that of all other individuals. 

While the Anarchist regards law as being essentially 
tyrannical, the Socialist believes that the widest liberty is 
often secured through the law. Many an Anarchist has 
enjoyed the privilege of free speech, for example, simply 
because he was under the protection of the law. From the 
point of view of the Anarchist who, after all, only carries 
the principle of laissez faire to its logical conclusion, our 
educational acts, factory acts, public health laws, and so on, 
are all tyrannical. From the point of view of the Socialist 
such manifestations of the collective will and law all widen 

1 Spargo, The Socialists, Who They Are and What They Stand For, 
p. 107. 



SOME OBJECTIONS TO SOCIALISM CONSIDERED 359 

the bounds of freedom, by repressing initiative upon low 
planes and forcing its development upon higher planes. 
The Anarchist contends that all laws are bad. The Socialist, 
on the other hand, holds that law is, per se, neither good 
nor bad. Laws which give the few power over the many- 
are bad because they are anti-social. But laws which make 
for social well-being are good and desirable. The conflict 
between the two systems of thought, therefore, is fundamen- 
tal and irreconcilable. 

(3) Socialism and bureaucracy: When we say that Social- 
ism regards the interest of society as supreme, we do not 
mean that it is less concerned than Anarchism for individual 
liberty. The Socialist ideal is not a huge bureaucracy, 
placing all human relations under the police powers of the 
State. On the contrary, the Socialist is just as solicitous 
for the freedom of the individual as any Anarchist. Of 
course, such a bureaucracy as many people fear might be 
developed, but it would not be a necessary result of the 
socialization of industry. Most modern Socialists believe 
that one of the results of Socialism would be the nullification 
of a vast body of laws and that the amount of control which 
the government of the Socialist State would have to exercise 
over the individual will be far less than we are now accus- 
tomed to. 

It must be remembered that a vast amount of government 
is involved in the regulation of capitalistic property and 
enterprise in our present social system. Experience has 
shown that for the restraint of capitalistic enterprise a 
tremendous amount of legislative and administrative effort 
is required. No one knows just how many of our laws would 
become obsolete with the socialization of industry, but it 
can hardly be doubted that the body of such laws would be 
very large. As it is to-day every fresh abuse of capitalism 
calls forth a new installment of legislation restrictive of 
personal liberty, and frequently humiliating and irritating 
to a degree that is oppressive. Armies of prying officials 
are engaged in the attempt to enforce these laws. Legislators 
are busy grinding out new laws, judges keep busy interpreting 
them and trying to enforce them. Bureaucratic government 
is not a thing of the future. It is already an established fact. 
We are to-day living under bureaucratic government. Every 



360 ELEMENTS OF SOCIALISM 

fresh attempt to "regulate" monopolies intensifies the bu- 
reaucratic character of our government. Modern capital- 
ist industry could not be tolerated under any other form 
of government. The Socialist view is that the socialization 
of industry would inevitably do away with a large part of 
the laws and the machinery for their enforcement which 
make a bureaucracy of what was once a relatively simple 
democratic government. 

(4) Socialism and religion: One of the objections which 
is most frequently urged against Socialism is its alleged 
antagonism to religion. It is obvious that the collective 
ownership of the means of production and exchange, which 
is the practical program of Socialism, is not incompatible 
with a belief in God, the immortality of the soul, the doc- 
trine of the atonement or the doctrine of the immaculate 
conception. The objection must, therefore, be based upon 
some other ground than that of the practical program of the 
Socialist movement. 

The Socialists themselves declare that Socialism is not 
antagonistic to religion. There is hardly a Socialist party 
in the world which has not adopted some statement to the 
effect that it does not in any manner concern itself with 
questions of religious belief or affiliation. In the Socialist 
movement of the United States there are orthodox Jews 
and Christians, Catholics and Protestants, Unitarians and 
Trinitarians, Methodists and Baptists, Christian Scientists 
and Atheists, Spiritualists and Agnostics. Men and women 
prominent in religious life hold positions of leadership in 
the party. In this respect the Socialist Party does not differ 
from any other political party. That many of the leaders 
of the Socialist movement have been free-thinkers is no 
more to be regarded as a proof that Socialism and religion 
are incompatible than the fact that prominent leaders in 
other parties have been free-thinkers. 

The opposition to evolution: If we trace the idea that 
religion and Socialism are antagonistic back to its source 
we shall find that it rests upon the thought that the Marxian 
theory of social evolution is incompatible with a belief in a 
Supreme Being. In considering this fact we must consider 
also the fact that the same idea was long held concerning 
the theory of evolution itself. When Darwin and Wallace 



SOME OBJECTIONS TO SOCIALISM CONSIDERED 361 

announced their great theory it immediately became the 
storm centre of the intellectual strife of the modern 
world. Science and dogma entered upon a long and bitter 
battle. No more bitter attacks have been made upon 
Socialism in the name of religion than were made upon 
the Darwinian theory. The attacks made upon Professor 
Huxley and other leading Darwinians were not less bitter 
and unchristian than those now made upon Socialists. 
Gradually the new science made its way, and the conflict 
has now to a large extent subsided. A man is no longer 
refused church fellowship and communion because he 
declares his belief in evolution. 

The conflict which was waged over the theory of evolu- 
tion ranged practically all the vigorous intellects of the time 
upon one side or the other. Both sides believed that the 
new theory would prove fatal to religion. Both sides believed 
that dogma and religion were one and the same. Now, the 
modern scientific Socialist movement arose at this time, and, 
quite naturally, partook of the temper and spirit of that 
science with which it felt itself to be so closely allied. It 
was inevitable, therefore, that the Socialist leaders should 
declare themselves to be against that religion which they, 
equally with their religious opponents, believed to be opposed 
to true science. Thus, the association of atheism and 
Socialism may be fairly described as an outcome of the 
confluence of two of the main streams of nineteenth-century 
thought, social radicalism and natural science, against which 
the Christian Church pitted itself. As we recede from that 
period of discussion and conflict, and see the issues in a 
clearer light and a truer perspective, we realize that the 
Socialists in declaring that there is nothing in the Socialist 
philosophy or program which is antagonistic to religious 
faith, are taking the only logical position. To a man who 
still believes that the world was made in six days of twenty- 
four hours, and that the Great Creator specially devised all our 
social institutions, any philosophy of social progress which 
admits the failure of any institution or concedes the possibility 
of improvement through human agencies, must seem to be 
antagonistic to his religion. Happily, however, religion is 
generally free from that narrow bondage. One of the most 
remarkable phenomena attending the development of Social- 



362 ELEMENTS OF SOCIALISM 

ism in recent years is the breaking down of the old mis- 
understanding which kept so many sincere and earnest 
men and women of religious faith and affiliation abof from 
the Socialist movement. 

(5) The question of incentive: The fear that Socialism 
would not provide an effective incentive to insure the steady 
progress of mankind is based upon two fundamental assump- 
tions, namely: that a Socialist society will reward all men 
equally, irrespective of the quality of their service to society, 
and that men will not strive to do their best unless they are 
spurred on by the hope of some special reward. We have 
already seen that the first of these assumptions is unwar- 
ranted; that ■ Socialism does not of necessity imply equal 
rewards for unequal services. There is nothing in the 
philosophy of Socialism which is incompatible with the 
offering of any kind of special reward for special social 
service. 

But even if we conceive the contrary to be the case, that 
under Socialism every human being must receive exactly 
the same income, it does not follow that men will have no 
incentive to labor with zeal, to make inventions, to create 
great works of art, to serve the State with diligence. It is 
not true that greed is the only effective incentive to human 
action, that but for the desire for gain no great service to 
society would ever be performed, no inventions or discoveries 
made, no masterpieces of art created. Such a view of the 
motive forces of human conduct is contrary to all the evi- 
dence we have. In our present society the incentive of gain 
is stronger perhaps than at any time in history; success is 
measured in terms of money; everything is priced. The 
struggle for money is the most striking fact of life. Surely, 
under these conditions, if at all, the incentive of greed must 
prevail over all others. But such is not the case; there are 
many men and women at work whose incentive is not 
material gain. 

Other incentives: First of all, there is the incentive of 
joy in work. Under capitalism, this, one of the most efficient 
incentives of human action, is greatly checked and weakened. 
The laborer is very generally divorced from that interest 
in his work which was the secret of the old craftsmanship. 
Nevertheless, there are many thousands of workers whose 



SOME OBJECTIONS TO SOCIALISM CONSIDERED 363 

greatest incentive is the joy of labor, to whom the old motto 
Laborare est orare has a vital meaning. Among teachers of 
all ranks love of their chosen profession forms a strong 
incentive and often keeps them from taking up more profit- 
able work. In the medical profession, again, joy in successful 
work is perhaps the most powerful of all incentives. The 
doctor who is worthy of his profession will fight a subtle 
and dangerous disease in a laborer's cottage with the same 
energy, courage and skill as if he were in a mansion. The 
combat calls forth the irresistible human passion for con- 
quest, for supremacy. Even if no other human being knew 
of it, the satisfaction of having won where many others fail 
would alone be a recompense. When there is a genuine 
freedom of choice of occupation, and economic conditions 
no longer force men into wrong places, to be "square pegs 
in round holes," and when the laborer is no longer oppressed 
by the sense that he is being exploited in order that others 
may live in idle luxury, this incentive will be greatly strength- 
ened. 

Closely allied to the satisfaction and joy in successful 
labor is the instinct and passion for creation, for discovery 
and for self-expression which we find in the inventor, the 
scientist and the artist. A great inventor like Edison could 
not refrain from inventing. To invent things is a passion 
which dominates life. An Edison would be happy with a 
modest income and freedom to experiment and invent, but 
miserable with the income of a billionaire if prohibited from 
inventing and experimenting. Few inventors have become 
rich as a result of their inventions, most of them have died 
poor. If the chance of gaining great wealth constituted the 
only incentive for invention there would be few inventions, 
for there are very few lines of human activity which offer 
less assurance of financial reward. But men cannot help 
inventing. Just as the chick must break the shell and set 
itself free, so must the creative impulse in man find expression. 
Lack of leisure, educational opportunities and experimental 
facilities — in short, the conditions of poverty and overwork 
— kill and stultify inventive genius. Wealth cannot make 
inventors, but poverty can kill them. What is true of the 
inventor is true also of the scientist, the philosopher, the 
artist and the poet. By making educational opportunities 



364 ELEMENTS OF SOCIALISM 

and experimental facilities common and free to all, by- 
insuring ample leisure to each individual, Socialism would 
liberate an amount of creative genius which would result in 
progress in every direction. 

For material reward men have done much, but they have 
never done their best. All the greatest achievements of 
mankind have been consummated without hope of material 
reward. Has the greatest statesmanship of the world been 
inspired by greed? Has it not rather been inspired by such 
motives as love of country, devotion to an ideal and the 
desire for approbation and honor? Has the desire for money 
inspired most of the great artists and poets? Have they not 
rather done their best work when inspired simply by love of 
beauty, love of doing and love of the esteem of their fellow 
men? Have the Newtons, the Darwins and the Spencers of 
the world's history been inspired by greed? Have they not 
rather been inspired by a passion for knowledge and love 
of truth? When we ask ourselves these questions and others 
like them we are driven to the conclusion that, even to-day, 
greed is not the most powerful of human motives. 

Incentive under Socialism: There is no material reward 
which capitalist society can offer an inventor which Socialist 
society could not offer if it were necessary to do so. Under 
Socialism, however, it would be possible for society to offer 
rewards infinitely more alluring than money. In all ages 
symbols of honor of trifling intrinsic value have been valued 
above riches. Thus the Greek athlete and the Greek poet 
struggled for the crown of olive leaves as they would not 
have struggled for riches. Thus, too, the British soldier 
values the little iron cross given "for valor" as a priceless 
possession. Such symbols are valued because they bring 
honor and esteem. The Socialist State could well create 
its own aristocracy of great achievement. 

Collective invention: The great bed-rock inventions of 
humanity were invented under tribal communism. What 
inventions have been of greater value to the world than the 
boat, the sail, the rudder, the lever, the wheel? But no 
man knows by whom they were invented. Every invention 
is in reality the assembling of many other inventions, a 
collective product. The socialization and combination 
which has taken place in industry has been to a very large 



SOME OBJECTIONS TO SOCIALISM CONSIDERED 365 

extent applied to the organization of invention and scientific 
discovery. Our great manufacturing plants, such as the 
General Electric Works at Schenectady, have their own 
departments of invention, great laboratories in which salaried 
inventors are continuously employed. The invention of new 
industrial processes has become a business. A manufacturer 
of cotton goods, for example, finds that certain fabrics do 
not dye well. Formerly, under such conditions, he would either 
have had to discard the fabric or experiment with various 
dyeing substances until his difficulty was overcome. Now- 
adays he refers his problem to a firm of experimental chem- 
ists. The State, also, has gone into the business of organized 
experiment and invention. Year after year inventions and 
discoveries which save many millions of dollars to the 
American people are made by employees of the U. S. Depart- 
ment of Agriculture. If the invention is such as to warrant 
its being patented, a patent is taken out in the name of the 
inventor and then dedicated to the government. The in- 
ventor obtains no pecuniary reward other than promotion 
with a slight increase in salary, except from royalties upon 
the use of the invention in foreign countries. The invention 
of a safe and satisfactory stamping ink for marking inspected 
carcasses that have passed the Government meat inspectors 
is said to be worth nearly half a million 'dollars a year to the 
Government, but Mr. Dorsett, the inventor, got only a 
promotion with an advance in salary amounting to about 
$1,000 a year. Dr. Cushman's invention of a process of 
manufacturing steel wire which will not rust when exposed 
to the weather is another such invention of almost incal- 
culable value. But the inventor, being already in receipt 
of the highest salary authorized by the law for a person 
working in his department, got no financial reward whatever. 
In like manner the Government employees of the Public 
Health and Marine Hospital Service are constantly mak- 
ing important discoveries concerning the nature, origin and 
methods of combatting disease. Medical research is being 
organized collectively in this manner as well as through 
great organizations like the Rockefeller Institute. Thus 
we have already the beginnings of a system of socialized 
invention, research and discovery, which the Socialist State 
may well develop. 



366 ELEMENTS OF SOCIALISM 

(6) Socialism and art: Of all the objections to Socialism 
perhaps the least worthy of serious consideration is the 
objection that it will destroy art. It rests upon the assump- 
tion that the State is to dictate to every individual what 
he shall do; it will choose certain boys and girls and say: 
"These are to be the sculptors and painters and composers 
of to-morrow." In other words, the source of the objection 
is a deep-rooted belief that Socialism must crush out all 
individuality, all forms of individual initiative and expression. 
As we have seen, this concept is entirely unwarranted. 

It was not without abundant warrant that the great 
English poet and artist, William Morris, regarded Socialism 
as the only hope for the future development of art. In the 
first place, an environment more unfavorable to the pro- 
duction of great and worthy art than modern capitalism 
creates it would be difficult to imagine. Where the great mass 
of the workers must labor without joy or interest in their 
work, and be for the most part mere servitors of machines, 
there can be no great art, except in individual cases which 
but serve to reflect the lack of art in life generally. What 
is most truly wonderful and inspiring about Greek sculpture, 
for example, is not the dazzling heights attained by a few 
great sculptors, as, for example, by Phidias, but the wonder- 
ful level attained by the ordinary workmen, as reflected, 
for instance, in the wonderful funeral reliefs in the National 
Museum at Athens. Art must have been an essential part 
of the lives of those workmen, otherwise the work of their 
hands would not have been so wonderful. In like manner, 
what impresses one about the marvellous medieval cathedrals 
and churches is the evidence upon every hand that in those 
days art was not something apart from life, to be enjoyed 
by a few, but a part of the life of every artisan. 

Surely, the Socialist is justified in claiming that, just as 
art cannot flourish under commercialism, it must flourish 
when the means of the common life have been brought 
under common control, when none are overworked to main- 
tain others in idleness, when there is leisure for all and 
freedom from want and the fear of want. It is worthy of 
note that the Golden Age of Greek art was that period when 
the slave-based communism of Athens was most highly 
developed. During the period of one hundred and fifty-two 



SOME OBJECTIONS TO SOCIALISM CONSIDERED 367 

years, 490 B.C. to 338 B.C., the dramas of ^Eschylus, 
Sophocles and Euripides and the sculptures of Phidias and 
Praxiteles were produced, and the Parthenon itself was 
designed by Ictinus and Callicrates. These developments 
were possible only because Athens was rich and her citizens 
were free from economic care and had leisure to gratify 
their constantly increasing passion for beauty. Not until 
the great poverty problem has been solved, and the oppor- 
tunities of life are socialized will art really flourish again. 
It is not without its significance that on the one hand the 
great modern artists are nearly all in sympathy with the 
Socialist movement, and that, on the other hand, they 
have been best understood by the people. When the critics 
mocked Millet, the radical workingmen understood; when 
Meunier portrayed the human struggle, it was the radical 
section of the working class that understood. No one who 
knows the life of the working people and their aspirations 
can doubt that the conditions under which they live and 
labor are responsible for the repression of an infinite amount 
of beauty which they would otherwise express. 

(7) As to human nature: Those who urge against Social- 
ism that human nature must be changed before its ideals 
can be realized have usually a low idea of human nature. 
They seem, moreover, to regard human nature as something 
very definite, certain qualities and instincts in every human 
being, unchanging from age to age. The fallacy is very 
obvious. In a Fifth Avenue club men are polite and cour- 
teous. That is human nature. Outside of the gates of a 
great factory in times of industrial depression, men will fight 
over jobs as so many hungry dogs would fight over a bone. 
Under such conditions, men seem to become brutes, but 
that, too, is only human nature. 

So far as we can speak of human nature at all, it consists 
of obedience to the fundamental instinct of self-preservation, 
and adaptation to environment. The superstitious fear of 
the African savage in the presence of a great calamity, and 
the scientific work of the enlightened man who sets about 
the task of remedying the evil wrought, both alike illustrate 
human nature in different stages of development. 

It is to that fundamental instinct of self-preservation that 
Socialism makes its appeal. It is perhaps the deepest and 



368 ELEMENTS OF SOCIALISM 

profoundest instinct in humanity to which the Socialist 
appeals. The secret of all human progress lies in the fact 
that men are forever striving to eliminate suffering and 
want. Goaded by a desire to obtain more of good in return 
for less labor and pain and sacrifice, mankind has progressed 
thus far. It is to that desire in the vast majority that Social- 
ism makes its appeal. So far from admitting that Socialism 
depends upon change in human nature, the Socialist con- 
tends that Socialism must come unless the fundamental 
human instincts and passions which we call human nature 
are changed. 






SOME OBJECTIONS TO SOCIALISM CONSIDERED 369 



SUMMARY 

1. Private business is honeycombed with graft, and the principal 
sources of graft in public business come from its relations with private 
business. Socialists contend that public ownership would remove the 
chief source of graft. 

2. Socialism and anarchism are fundamentally opposed to each other 
in both theory and tactics. 

3. Socialists do not wish a huge bureaucracy. On the contrary, 
they wish to abolish the bureaucracy of capitalist society. 

4. Socialism is not incompatible with religion and does not concern 
itself in any way with religious belief . 

5. Socialism would not do away with any socially desirable incentive, 
but it would add to the strength of the highest incentives which inspire 
mankind. 

6. Socialism appeals to the most fundamental instincts of human 
nature, and Socialists contend that Socialism must win unless human 
nature is changed. 

QUESTIONS 

1. Give the Socialist answers to objections 1-15 inclusive by refer- 
ence to the preceding chapters. 

2. In what forms does graft exist in private business? 

3. Upon what grounds do Socialists base their belief that Socialism 
will be relatively free from graft? 

4. Contrast the principles of Anarchism with those of Socialism. 

5. What is the attitude of Socialists towards bureaucracy? 

6. What is the source of the idea that religion and Socialism are 
antagonistic? 

7. What are the chief incentives to human activity? 

8. What is the effect of commercialism upon art? 



Literature 

Kelly, E., Twentieth Century Socialism, Book I, Chap. III. 
Spargo, J., The Socialists, Who They Are and What They Stand For, 
Chap. XVI. 
Vail, C. H., Principles of Scientific Socialism, Chap. XIII. 
Vandervelde, E., Collectivism, Chap. VI. 



INDEX 



Acts, The, 188 n. 

Adler, Victor, 280, 321, 346. 

Advertising, 21. 

Agents, 23. 

Agricultural Experiment Stations, 
215. 

Agricultural Stage, 92. 

Agriculture, Concentration in, 11, 
27, 162, 163; Department of, 365; 
Labor in, 343; under Socialism, 
238. 

Alcoholism, 345-347. 

Alexander II of Russia, 303. 

Alexander VI, Pope, 244. 

Alsace-Lorraine, 203. 

America: class distinction in, 101; 
industrial concentration in, 159- 
160. See also United States. 

American Federation of Labor, 295- 
296, 299-300, 329. 

American Steel and Wire Company, 
169, 170. 

American Tobacco Company, 175, 
178. 

American Underwriter, The, 32. 

Amsterdam, International Congress 
at, 8, 263, 278. 

Anabaptists, 241. 

Anarchism: and coercion, 218; and 
Socialism, 358-359; and the fam- 
ily, 243; in America, 295; in Hol- 
land, 308; in France, 275; in 
Spain, 310. 

Ancient Society (Morgan), 71 n. 

Animal Society, 66. 

Anseele, Eduard, 282. 

Arbitration, International, 352. 

Argentina, 312. 

Aristotle, 210. 

Arkwright, Richard, 94. 



Armenia, 312. 

Art, 219, 366-367. 

Athens, 187, 210, 367. 

Australia, 96, 182, 261, 312. 

Austria: and Poland, 310-311; 
Socialism in, 264, 279-281 ; Social- 
ist policies in, 344, 346. 

Aveling, Edward, 286. 

Aveling, Eleanor Marx, 286. 



B 



Babeuf, Francois-Noel, 191, 275. 

Babylonia, 73, 93. 

Bachelors' Companies, 94. 

Bachofen, 249. 

Bacon, Francis, 190. 

Baden, 271. 

Bakunin, Michael, 257, 262, 283, 
302. 

Ballot, The, 190, 339. 

Banking, 22. 

Barbarism, 71. 

Barcelona, 310. 

Barnave, 191. 

Basiliade, The, 191. 

Bax, E. Belfort, 243, 286, 287, 337. 

Bazard, Armand, 256. 

Bebel, August: and Bismarck, 
322; Biographical, 273; and Ei- 
senach Party, 267; on Monar- 
chy, 8 ; and parliamentary tactics, 
319-320; on the State, 213; on 
the family, 243; quoted, 213. 

Beesby, E. S., 286. 

Belgian Labor Party, History, 281; 
on abolition of the Senate, 340; 
on agricultural labor, 343; on 
public health, 345 ; on alcoholism, 
346; on taxation, 347, 348. 



371 



372 



INDEX 



Belgium: Socialism in, 264, 281- 
282; cooperation in, 282, 326; 
proportional representation in, 
339 ; second ballot in, 339 ; public 
ownership in, 348. 

Bell, Richard, 289. 

Bellamy, Edward, 198, 293. 

"Benevolent Feudalism," 66, 195. 

Bernstein, Eduard, 88, 108, 158, 159, 
271. 

Berge, Prof., 307. 

Berger, Victor L., 297, 298. 

Besant, Mrs. Annie, 286, 291. 

Bismarck, 203,266,268,269; quot- 
ed, 321-322. 

Blacklist, The, 113. 

Blanc, Louis, 234, 255, 260, 275. 

Bland, Hubert, 291. 

Blanqui, Louis Auguste, 275. 

Blanquists, The, 277. 

Bobrikoff, Gen., 305. 

Bohemia, 280. 

Bohm-Bawerk, 137. 

Boissel, 191, 275. 

Bonanza Farms, 27, 163. 

Booth, Charles, 31. 

Boston, 31. 

Boycott, The, 113. 

Briand, Aristide, 279. 

Brisbane, Albert, 292. 

British Columbia, 312. 

British Socialist Party, 292. 

Britons, 104. 

Brook Farm, 256, 292. 

Brookline, 36. 

Brousse, Paul, 277. 

Brussels, 257, 263. 

Buecher, Karl, 91. 

Bulgaria, 312. 

Bureaucracy, 239, 359. 

Burns, John, 286-287. 

Burrows, Herbert, 286. 



Cabet, Etienne, 191, 197, 256, 257, 

276. 
Cabot, John, 86. 
Cambria Stool Company, 169. 
Campanella, Tomasso, 190. 
Canada, 312. 



Canals, 215, 216, 237. 

Capital, nature of, 145. 

Capital (Marx), 162 n. ; writing of, 
258; quoted, 7, 118, 128, 144 n., 
153, 157. 

Capitalism, gains under, 13; stages 
of, 157. 

Capitalist class, 8, 104, 107-108, 
111-113. 

Carey, Henry C, 124 n. 

Carpenter, Edward, 286. 

Cartwright, Edmund, 94, 195. 

Celibacy, 241-242. 

Charles I. of England, 190. 

Charles II. of England, 191. 

Charities and the Commons, 41 n., 
42 n. 

Charity, 41, 216. 

Chartism, 255, 285. 

Chernyschefsky, Nicholas, 301, 302. 

Child labor, in England, 95, 236; 
poverty and, 37; prevention of, 
39, 216; Socialist parties on, 342; 
and vice, 247. 

Chili, 312. 

China, 312. 

Christianity, 188, 202, 241-242, 243, 
244. 

Christian Socialist Party, 280. 

Cicero, 205. 

City of the Sun, The, 190. 

Civilization, 72-74. 

Civil War, American, 87, 97. 

Clan, The, 69-70. 

Clark, C. C, quoted, 170. 

Class, Definition of, 102. 

Class Divisions: Antiquity of, 
103; character of, 8-10, 104; econ- 
omists on, 105; St. Simon on, 
191; Socialist ideal and, 205, 207; 
and reform program, 323. 

Class Struggle theory, The, 100 et 
seq. 

Class consciousness, 110. 

Classes and Masses (Mallock), 102. 

Clemenceau, Georges, 279. 

Coats, J. & P., Company, 174. 

Code de la Nature (Morelly), 191. 

Coercion, 217-218. 

Colchester, 181. 

Collective ownership, 348, 352. 



INDEX 



373 



Collectivism (Vandervelde), 350 n. 

Columbus, 86. 

Commodity, definition of, 119. 

Common Sense of the Milk Question, 
The (Spargo), 15 n. 

Commonweal, The, 287. 

Commune, the Paris, 276, 285. 

Communism: Primitive, 70, 92; and 
Socialism, 259; among early- 
Christians, 188; in Athens, 187; of 
Campanella, 190; of Owen, 195; 
sex, 242-244. 

Communist League, 256, 260, 261. 

Communist Manifesto, publication 
of, 63, 258; and the Communist 
League, 256; description of, 258- 
259; draft of, 258; and the Inter- 
national, 261 ; ideal of, 202 ; crit- 
icism of, by Bernstein, 108-109; 
on reform, 317; on degradation of 
workers, 317-318; program in, 
322; on taxation, 348; on capi- 
talism, 13 n.; quoted, 100, 226, 
248, 317-318. 

Compensation, 348, 349, 350-351. 

Competition, 19 et seq., 349-350. 

Comrade, The, 310 n. 

Confiscation, 348, 349-350. 

Conquest of Bread, The (Kropotkin) , 
218 n. 

Conservation of natural resources, 
352. 

Contribution to the Critique of Polit- 
ical Economy, A (Marx), 258; 
quoted, 77, 78. 

Cooperation, 229, 231, 282, 325, 326. 

Copenhagen, Congress at, 263, 290, 
312. 

Costa, Andrea, 283. 

Courts in the United States, 113. 

Crane, Walter, 291. 

Credit, monopoly of, 237. 

Crime, 39, 216, 218. 

Crises, 25. 

Crompton, Samuel, 94. 

D 

Da Gama, Vasco, 86. 
Dangerous work, 235, 236. 
Darwin, Charles, 19, 63, 258, 360. 



Debs, E. V., 297. 

Decentralization, 352. 

De Gallifet, Gen., 278. 

De Leon, Daniel, 296-297. 

Democracy, 217, 221. 

Democratic Federation, the, 286. 

Democratic Party, the, 335. 

De Molinari, 275. 

Denmark, 307. 

De Paepe, Cassar, 282. 

Deviile, Gabriel, 276, 277. 

Devine, Edward T., quoted, 41, 42. 

De Vries, Hugo, 66. 

Die Gleichheit, 274. 

Die Heilige Familie (Marx), 77. 

Die Republik der Arbeiter, 293. 

Die Voraussetzungen des Sozialismus 
(Bernstein), 159 n., 271. 

Direct appropriation, stage of, 92. 

Direct legislation, 338. 

Disagreeable work, 235-236. 

Disease, 32-34, 40. 

Distilling Company of America, 
The, 169. 

Distilling and Cattle Feeding Com- 
pany, The, 179. 

Divorce, 244-246. 

Documentary History of American 
Industrial Society, 327 n. 

Domestic system, the, 94, 111. 

Drainage, 215. 

Dreyfus case, 278. 

Drysdale, Charles R., 36. 



E 



Economic Interpretation of History, 
The (Seligman), 78 n. 

Economic interpretation of history, 
The, 64, 76 et seq. 

Economic stages, the, 91 et seq. 

Edison, Thomas A., 363. 

Education, 220, 352. 

Edwards, Jonathan, 209. 

Egypt, 73. 

Eisenach, Congress at, 267. 

Eisenach Party, the, 267, 273, 231. 

Elements of Political Economy (Nich- 
olson), 119 n. 

Elliot's Debates, 340 n. 



374 



INDEX 



Encyclopedia of Social Reforms 
(Bliss), 40 n. 

Encyclopedists, the, 275. 

Engels, Fredeeick: biographical, 
257-258; and the Communist 
Manifesto, 259; and Germany, 
266; and the Independent Labor 
Party, 288; and Kautsky, 273; 
and the Social Democratic Feder- 
ation, 287; quoted, 62-63, 78, 88, 
100, 213, 226, 248-250, 288, 317- 
318, 350. 

England: agricultural stage in, 93; 
and Belgian Socialism, 326; class 
struggle in, 255; death duties in, 
165; factory legislation in, 195; 
conditions at time of More, 189; 
combination in, 174; handicraft 
stage in, 93 ; industrial revolution 
in, 94; industrial reform in, 236; 
national economy in, 97; pov- 
erty in, 31; shareholders in, 158; 
Socialism in, 285-292; trade 
unions in, 326-328. See Great 
Britain. 

England for All (Hyndman), 286. 

Employers' associations, 112, 233. 

Equality of opportunity, 207. 

Erfurt, Congress at, 269. 

Erfurt program, 207, 320; quoted, 
269. 

Erickson, Dr., 307. 

Ethics, 82. 

Eugenics, 241. 

Evolutionary Socialism (Bernstein), 
159 n., 271. 

Exceptional laws, 268. 



Family, The, 67, 68-69, 240-251. 

Farmer, the, under Socialism, 227. 

Farmers' program, 243. 

Farr, William, 32. 

Federal incorporation, 176. 

Ferrer, Francisco, 310. 

Feudalism, 93, 104, 214. 

Finland, 264, 305-306, 347. 

Fisher, Irving, 32. 

Forbes, James, 34. 

Fourier, Charles: his life and 

theories, 192-195; and Owen, 

197; and French Socialism, 275; 

and modern Socialism, 61, 62, 63, 

201, 202. 
Fourierism, description of, 193-195; 

decline of, 256; in the United 

States, 292. 
France, class struggle in, 255; and 

Belgian Socialism, 326; Socialism 

in, 264, 275-279; at time of St. 

Simon, 191; tobacco monopoly 

in, 182. 
Franco-Prussian War, 267. 
Frank, Dr., 271, 272. 
Franklin, Benjamin, 124 n. 
" Free love," 240. 
Free Soil Party, 292. 
Free will, 81. 
Fremont, John C, 240. 
French Revolution, 8, 191. 
French Socialist Party, history, 276- 

279; program, 340, 343, 345, 347. 
Fritzsche, Wilhelm, 330. 



Fabian Society, The, 289, 290-291, 
330, 350. 

Factory inspection, 216, 342. 

Factory legislation, 195, 197, 342- 
343. 

Factory system, 95, 112. 

Fall River, 36. 

False Industry and its Antidote (Fou- 
rier), 192. 



Galicia, 311. 

Gary, E. H., 176. 

Gates, John W., quoted, 170. 

General Electric Company, 365. 

General German Workingmen's As- 
sociation, 294. 

General strike, 284, 299; in Sweden, 
306. 

General Workingmen's Association, 
266, 267. 

George, Henry, 286, 295, 348. 

Genesis, 92. 

Geneva, 262, 276, 309. 



INDEX 



375 



German Social Democracy: his- 
tory, 267-274; American Social- 
ist Party and, 299; and alcohol- 
ism, 346; and emancipation of the 
wage-workers, 207; as peace or- 
ganization, 203; and public 
health, 345; and social insurance, 
344; tactics and program, 319- 
324; and taxation, 347; and 
trade unions, 330-332. 

German Workingmen's Club, 257. 

Germany: and Austria, 279-280; 
and Belgian Socialism, 326; sec- 
ond ballot in, 339; shareholders 
in, 159; Socialism in, 264, 266- 
275. 

Gerry, Elbridge T., 246 n. 

Ghent, cooperatives at, 282. 

Giddings, F. H., quoted, 66, 67, 235. 

Gladstone, W. E., 285. 

Glasgow, 18*1. 

Gotha, Congress at, 267, 268, 269. 

Gotha Program, quoted, 268. 

Gothenburg system, 347. 

"Graft," 181, 355-358. 

Great Britain: cooperation in, 
325; Chartism in, 255; public 
ownership in, 180, 181, 348; So- 
cialism in, 285-292. See Eng- 
land. 

Great man theory, 76, 85. 

Great plague, 189. 

Greece, 47, 73, 312 

Greek household, 96. 

Greeley, Horace, 292. 

Greenback Party, 294. 

Grutliverein, 309. 

Guaranties of Harmony and Freedom, 
The (Weitling), 256. 

Guesde, Jules, 267, 268, 269, 351. 

Guilds, 93-94, 214. 

Guizot, 77. 



Hammurabi, Code of, 93. 
Handicraft stage, 93. 
Hardie, J. Keir, 288, 289. 
Hargreaves, James, 86, 94. 
Harriman, Job, 297. 
Harrington, James, 190. 



Health, public, 344-345. 

Hebrew Patriarchs, 92. 

Hegel, 77. 

Heine, Heinrich, 257. 

Henry VIII. of England, 188. 

Herzen, Alexander, 301, 302. 

Hillquit, Morris, 301. 

History of Trade Unionism (Webb), 

326 n., 327 n. 
Holding company, 172. 
Holland, 308, 309. 
Holt, Hamilton, 204 n. 
Homeric Poems, 72. 
Hours of labor, 342-343. 
Household economy, 96. 
Howells, William Dean, 199. 
Human nature, 367-368. 
Hungary, 311. 
Hunter, Robert, 32, 46 n. 
Huysmans, Camille, 282. 
Hyndman, Henry M., 286, 287. 



Iglesias, Pablo, 310. 
Impossibilists, 277. 
Incentive, 362-365. 
Income taxation, 347. 
Independent Labor Party, 287-290, 

338, 346. 
India, 86. 
Indiana, 195. 

Indians, American, 70, 72. 
Individualism, 53 et seq, 209, 239. 
Industrial revolution, the, 94, 221. 
Industrial stage, the, 95. 
Industry, direction of, 233. 
Infant schools, 196. 
Inheritance, 45; taxes, 347. 
Initiative and Referendum, 338. 
Injunctions, 114, 342. 
Inquiry into the Nature and Origin of 

Public Wealth (Lauderdale), 136 n. 
Insurance, 23; social, 216, 342-344. 
Intercollegiate Socialist Society, 301. 
Integralists, 284. 
International Alliance, 256, 257. 
International relations, 219. 
International Socialist Bureau, 263, 

282, 290. 



376 



INDEX 



International Workingmen's As- 
sociation: history, 261-263; in 
America, 294; in Belgium, 282; 
in Denmark, 307; in England, 
285; in France, 275; reform pro- 
gram, 317-323; and trade unions, 
327; and war, 205. 

Internationalism, 202. 

Interstate Commerce Act, 215. 

Invention, 364-365. 

Ireland, 69. 

Irish Land League, 285. 

"Iron Law of Wages," 14, 147, 268. 

Iroquois Confederacy, 70. 

Irrigation, 215. 

Israelites, 70, 80. 

Italian Socialist Party, 283-284, 345. 

Italy: public ownership in, 182; 
Mazzini in, 256; Socialism in, 
283-285. 

J 

Jahve, 80. 

Japan, 182, 312. 

Jaures, Jean, 8, 277, 278, 279. 

Jedrzejowski, B. A., quoted, 310. 

Jena, Congress at, 271 n., 274 n. 

Jenks, J. W., 179. 

Jesuits, in Paraguay, 190. 

Jesus, 188, 192. 

Jevons, W. S., 133; quoted, 135- 

136; 138. 
Jowett, Prof., 241. 
Judges, election of, 341. 
Judicial veto, 113, 341. 
Jukes, the, 209. 
Justice, administration of, 219-220, 

340-341. 
Justice (London), 287. 
Juvenile movement, 274, 300-301. 



Kant, Immanuel, 205. 

Karl Marx, his Life and Work (Spar- 
go), 331 n. 

Katayama, S<m, 312. 

Kautsky, Karl, 273; quoted, 147, 
101, 351-352. 

Kay, John, 94. 

Kelly, Edmond, 238. 



Kentucky, tobacco planters in, 28. 
Kingdom of Heaven, the, 188. 
Knights of Labor, 295, 328. 
Kolokol, 302. 

Kropotkin, Peter, 20, 218. 
Kuyper, Dr., 309. 



Labor, meaning of, 128; abstract, 
128. 

Labor checks, 238. 

Labor Party, the, 289-290. 

Labor power, 146 et seq. 

Labor Problems (Adams & Sumner), 
26 n. 

Labor Representation Committee, 
288, 289. 

Labriola, Arturo, 284. 

Lafargue, Paul, 277. 

Lammenais, quoted, 206. 

Lancashire, 98. 

Land, 238. 

Lasalle, Ferdinand: biographical, 
266-267; and Iron Law of Wages, 
14, 147; and Hungary, 311. 

Lasallean Socialism, 266, 268, 320. 

Lauderdale, Lord, 135. 

Lavroff, Peter, 302. 

Law, 22, 84. 

League of the Just, 256. 

Ledebour, George, 274. 

L'Egaliti, 276. 

Legien, Karl. 274. 

Leisure and Luxury, 44 et seq. 

L'Humanite, 278. 

Liberty, under Socialism, 218; of 
occupation, 235. 

Liebknecht, Karl, 274. 

Liebknecht, Wilhelm, biographical, 
273, 274; and Eisenach Party, 
267; quoted, 110, 212, 319, 320, 
351. 

L' Industrie (St. Simon), 191. 

Lipton's, 158. 

Lockout, the, 113. 

London, founding of International 
at, 261; provisioning of, 19; So- 
cialist Congress at, 263 ; universal 
exhibition at, 261; work of Booth 
in, 32. 



INDEX 



377 



Looking Backward (Bellamy), 198, 

293. 
Louis Philippe, 255, 260. 
Luther, Martin, 80, 240, 273. 
Luxemburg, Rosa, 274. 
Luxury, social effect of, 50. 

M 

Mably, 275. 

Madison, James, quoted, 340 

Magdeburg, Congress at, 271. 

Maison du Peuple, 282. 

Mallock, W. H., 102; quoted, 128. 

Malloney, Jos. F., 297. 

Malon, Benoit, 277. 

Manchester Canal, 158. 

Mann, Tom, 286, 287. 

Manorial Economy, 93. 

Marriage, 240 et seq. 

Marshall, John, 341. 

Marx, Heinrich, 257. 

Marx, Karl: biographical, 257- 
259; and the Communist Mani- 
festo, 258; and St. Simon, 62, 191; 
and the International, 261, 263; 
and Germany, 266; first declared 
Socialist, 275; protest against 
Gotha program, 268; and Lieb- 
knecht, 273; influence of, 61; his 
philosophical synthesis, 63; his 
sociological viewpoint, 118; and 
economic interpretation of history, 
76-79, 88; and theory of value, 
116-119; on Social Reform, 317- 
318; on tactics, 322-323; on 
unionism, 327-331; on means of 
socialization, 350; quoted, 7, 12, 
13, 76-77, 107, 118, 128, 144 n., 
157, 206, 226, 248. 

Massachusetts, 297-298. 

Matchett, Charles H., 295. 

Materialistic conception of history, 
76. See Economic Interpretation 
of History. 

Mayas, the, 72. 

Mazzini, Guiseppe, 256, 261, 286. 

Menger, Anton, 133. 

Meunier, 367. 

Mexican War, 86. 

Mexico, Indians of, 72. 



Middle class, the, 10, 108-109. 

Militarism, 22, 203-205. 

Mill, John Stuart, quoted, 82, 106, 

124. 
Millerand, Etienne, 277, 278. 
Millet, Jean Frangois, 367. 
Milwaukee, 298. 
Mir, 71. 
Misery and its Causes (Devine), 

quoted, 41. 
Modern Socialism (Ensor), 350 n. 
Molkenbuhr, Herman, 274. 
Mommsen, Theodor, 203. 
Money, 131, 237-238. 
Monopoly, 26,28, 118 etseq.;= price, 

138. 
More, Sir Thomas, 188, 198, 199. 
Morelly, 191, 212, 275. 
Morgan, Lewis H., 70, 71. 
Morris, William, 198, 243, 286, 287, 

366. 
Mosaic Law, 93. 
Most, John, 295. 
Municipal autonomy, 352. 
Mutation theory, the, 66, 221. 

N 

Napoleon, 85. 

National Economy, 97. 

National workshops, 255. 

New Atlantis (Bacon), 190. 

New Harmony, 62, 195. 

New Industrial World (Fourier), 192. 

New International, the, 263. 

New Lanark, 195, 196. 

New York, State, 70; City, 81, 246, 
263, 294. 

New York Times, 204 n. 

New York Tribune, 292. 

New Zealand, 182. 

News from Nowhere (Morris), 198. 

Nicholson, J. S., 119. 

Nieuwenhuis, Domela, 203, 308. 

Nihilism, 302. 

Normans, 104. 

Norse Sagas, 72. 

North American Review, 179 n. 

Norway, 307, 346. 

Nouveau Christianisme, Le (St. Si- 
mon), 191. 



378 



INDEX 



O'Brien, Bronterre, 286. 

Oceana, 190. 

Old age, poverty and, 38; pensions, 
342, 344. 

Olivier, Sidney, 291 

Opportunism, 299, 318-319, 323. 

Origin of Species, The, 358. 

Origin of the Family, Private Prop- 
erty, and the State, The (Engels), 
249, 250. 

Over-production, 24. 

Owen, Robert, 61-62, 191, 195, 
199, 259. 

Owenism, 256, 285. 



Panama Canal, 215, 237. 

Paraguay, 190. 

Parcels Post, 215. 

Paris, Congress at, 263; Commune, 

276, 285. 
Pastoral stage, 92. 
Paul, quoted, 210. 
Pauperism, 34, 35, 36. 
Peasants' Revolt, 189. 
Pennsylvania Railroad, 162. 
People, The, 296. 
Perfectionists, the, 241. 
Perovskaia, Sophia, 303. 
Persia, 86, 312. 
Peru, 72. 

Petty, Sir William, quoted, 123. 
Phalanx, the, 193. See Fourier. 
Phelps, Edward Bunnell, 32. 
Philanthropy, 56. 
Plato, 187, 240, 241. 
Poland, 280, 310-311. 
Political corruption, 181, 357-358. 
Pool, the, 172. 
Populist Party, 294. 
Portugal, 312. 
Possibilisto, 277. 
Postal Savings Banks, 215. 
Poverty (Hunter), 27 n., 40 n. 

Poverty, 30 13. 
Preferential Ballot, 340. 



Present Distribution of Wealth in the 
United States, The (Spahr), 165 n., 
166 n. 

Price, 130 et seq. 

Principles of Economics (Seligman), 
134 n. 

Principles of Political Economy 
(Carey), 124 n. 

Principles of Political Economy (J. 
S. Mill), 106 n., 124 n. 

Principles of Political Economy and 
Taxation (Ricardo), 124. 

Principles of Sociology (Giddings), 
67 n. 

Principles of Sociology (Spencer), 10. 

Private industry, under Socialism, 
227-231. 

Private property, 68, 70, 71; under 
Socialism, 221, 224, 227. 

Progress and Poverty (George) , 286. 

Proletariat, the, 9, 109, 114. 

Proportional Representation, 338- 
339. 

Prostitution, 40, 246-247. 

Protection of workers, 318, 342. 

Protestant Revolt, 80, 87, 240, 244. 

Proudhon, Pierre J., 257, 262, 275. 

Prussia, incomes in, 158; Lasalle 
Association in, 266, 267; manu- 
facturing establishments in, 159; 
and Poland, 310; State Socialism 
in, 182. See Germany. 

Public Health, 344-345. 

Public ownership, extent of, 180- 
183; and "Graft," 355-358; in- 
crease of, 215-216; methods of ac- 
quiring, 348-352; under Social- 
ism, 224, 227. 



Q 



Quarterly Journal of Economics, 61 n. 



R 



Radical Socialist Party, 279. 
Rand School of Social Science, 301. 
Recall, the, 338. 
"Red" unions, 273. 
Referendum, the, 338, 340. 






INDEX 



379 



Reform BUI of 1832, 255. 

Reformists, 284. 

Religion, economic interpretation of 
history and, 79; and marriage, 
241; and prostitution, 246; ori- 
gins of, 68; and Socialism, 360- 
362. 

Remarks and Facts Relative to the 
American Paper Money (Frank- 
lin), 124 n. 

Remmel, Val., 297. 

Remuneration of Labor, 233, 235, 

Rent, 238. 

Report of the United States Industrial 
Commission, 169 n., 170 n. 

Report on National Vitality (Fisher), 
32 n., 34 n. 

Republic, The, of Plato, 187, 190, 
240, 241 n. 

Republican Party, 240. 

Restraint of Trade, 174. 

Revisionism, and the Class Struggle 
Theory, 108; and economic inter- 
pretation of history, 88; Fabian 
Society and, 291; in Germany, 
271-272; and theory of concen- 
tration, 158. 

Revolution, American, 86. 

Revolution of 1848, 259-260. 

Revolutionism, 318-319, 323. 

Ricardo, David, quoted, 123, 125, 
147. 

Road to Power, The (Kautsky) , 147 n. 

Roman Catholicism, 80, 244, 246, 
307. 

Roman Empire, 80. 

Rousseau, Jean Jacques, 275. 

Rowntree, B. S., 31. 

Ruskin, John, 55. 

Russia, Socialism in, 301-305; and 
Finland, 305-306; and Poland, 
310-311. 

Ruthenians, 280. 



S 



Saint-Simon, biographical, 191-192; 
and French Socialism, 275; and 
Fourier, 192; and Socialist The- 
ory, 61. 

Saint-Simonism, 191-192, 256. 



SaniairLucien, 160, 296. 

Sanitation, 216. 

Sassulich, Vera, 302. 

Savagery, 71. 

Saxons, 104. 

Saxony, 267. 

Science, 219. 

Scotland, clan system in, 69. 

Second Ballot, the, 338-339. 

Seligman, E. R. A., quoted, 134. 

Senate, abolition of, 340. 

Servant, the, and Society, 48-49. 

Servia, 312. 

Shakers, the, 241. 

Shaw, G. Bernard, 290. 

Sherman Anti-Trust Act, 85, 175. 

Single Tax, the, 294, 348. 

Slavery, beginning of, 92, 103; in 

Greece, 47, 73. 
Smith, Adam, 16; quoted, 105, 123. 
Social Classes, 8-10, 100 et seq. 
Social Democracy of America, 293, 

297. 
Social Democratic Federation, 286, 

287, 290, 292. 
Social Democratic Labor Party 

(Holland), 308-309. 
Social Democratic Party (Austria), 

280. 
Social Democratic Party (Denmark), 

307. 
Social Democratic Party (Finland), 

305-306. 
Social Democratic Party (Germany) , 

268-274. See German Social De- 
mocracy. 
Social Democratic Party (Great 

Britain), 290, 291, 292, 338, 340. 
Social Democratic Party (Holland), 

308. 
Social Democratic Party (Norway), 

307. 
Social Democratic Party (Russia), 

303, 304. 
Social Democratic Party (Sweden), 

306-307. 
Social Democratic Party (Switzer- 
land), 309. 
Social Demokraten, 307. 
Social Evolution, 65-73, 213, 222. 
Social mind, the, 67. 



383 



INDEX 



Social Party of New York and vi- 
cinity, 294. 

Social Reform, 317-335. 

Social Revolution, The (Kaustky), 
161 n. 

"Social Workshops," 255. 

Socialism: and Anarchism, 358- 
359; and Art, 366-367; and bu- 
reaucracy, 359-360; and Com- 
munism, 259; and the family, 
240-251; definition of, 5; essen- 
tial principle of, 224-225; and 
incentive, 362-365; and human 
nature, 367-368; and Karl Marx, 
61; numerical strength, 4, 264; 
and the principle of evolution, 65; 
and religion, 360-362; scientific, 
64; and State regulation, 176; 
and trade unionism, 326-327. 

Socialism (Mallock), 128 n. 

Socialism before the French Revolu- 
tion (Guthrie), 189 n. 

Socialism Inevitable (Wilshire), 161 
n. 

Socialism, its Growth and Outcome 
(Morris & Bax), 243. 

Socialism, Utopian and Scientific 
(Engels), 214 n. 

Socialist Labor Party (Spain), 310. 

Socialist Labor Party (United 
States), history, 294-296; and 
trade unions, 328-330; program, 
332. 

Socialist League, 287. 

Socialist Party (France). See French 
Socialist Party. 

Socialist Party (British), 292. 

Socialist Party (Italy), 283-284, 345. 

Socialist Party (United States): 
history, 297-300; and Democratic 
Party, 332; Farmers' program, 
343; and alcoholism, 346; v and 
hours of labor, 343; and the judi- 
ciary 341; program, 337; and 
public health, 345; and reform, 
332; and social insurance, 344; 
and taxation, 347; and trade 
unions, 330. 

Socialist Revolutionary Party (Rus- 
sia), 303, 304, 305. 

Socialist Sunday Schools, 300, 301. 



Socialist Trade and Labor Alliance, 
296, 329. 

Socialists, The, Who They Are and 
What They Stand For (Spargo), 
358 n. 

Socialization, means of, 348, 352. 

Sociology, Principles of (Giddings), 
67 n. 

Sociology, Principles of (Spencer), 
quoted, 10. 

South Africa, 312. 

South America, 96, 312. 

South Carolina, 245. 

Sozial Demokrat, 269. 

Sozialistische Akademiker, 78 n. 

Spahr, Charles B., 165, 166. 

Spain, 310. 

Spanish American War, 87, 310. 

Spence, Thomas, 286. 

Spencer, Herbert, 63; quoted, 10. 

Standard of Life, 15. 

Standard Oil Company, 168, 172, 
175, 178. 

State Socialism, 182. 

Statute of Laborers, 189. 

Steffens, Lincoln, 357. 

Strike, the, 112, 113. 

Students' Circles, 276. 

Studies in Socialism (Jaur&s), 261, 
351 n. 

Stuttgart, Congress at, 263. 

Sudekum, Albert, 274. 

Suffrage, Equal, 334, 337. 

Surplus-Value, 148, 155. 

Sweden, cedes Finland, 305; pro- 
portional representation in, 339; 
public ownership in, 182; Social- 
ism in, 306-307. 

Switzerland, 182, 309. 

Syndicalism, 284, 299, 308. 



Taff Vale Decision, 288. 
Taft, Wm. H., 176. 
Taxation, 216, 347-348. 
Taylor, Helen, 286. 
Temperance problem, 345-347. 



INDEX 



381 



Terrorism, 302, 303-304. 

Theory of the Four Movements, The 
(Fourier), 192. 

Theory of Political Economy, The 
(Jevons), 135 n., 136 n., 138 n. 

Thome, William, 290. 

Town Economy, 97. 

Trade Unions: in the Class Strug- 
gle, 111-112; and direction of in- 
dustry, 233; freedom of combina- 
tion, 342; and Socialism, 326-330; 
in Germany, 272-273; in Eng- 
land, 287-290; in Hungary, 311; 
in France, 376 ; in Russia, 303 ; in 
Spain, 310; in the United States, 
295, 299. 

Trade Unionism, History of (Webb), 
326 n., 327 n. 

Transitional State, the, 221. 

Traveller from Altruria, A (Ho wells), 
199. 

Treatise on Domestic and Agricultural 
Association (Fourier), 192, 

Treatise on Taxes and Constitutions 
(Petty), 123 n. 

Trepoff, Gen., 302. 

Tribe, the, 70. 

Troelstra, Pieter J., 308. 

Trust, the, 172. 

Trusts of To-day (Montague), 169 n. 

Turati, Philip, 284. 

Turkey, 86, 312. 

Turnvereine, 293. 

Twentieth Century Socialism (Kelly), 
238 n. 

U 

Unemployment, 27, 342. 

United Labor Party, 295. 

United States: Department of 
Agriculture, 365; public owner- 
ship in, 180; Socialism in, 264, 
292-301, 328-330; trade unions 
in, 327, 328-330; wars of, 86. 

United States Steel Corporation, 169, 
170, 171, 173, 176. 

Utopia, The (More), 188-190, 198. 

Utopian experiments, 194-195, 292- 
293. 



Vaillant, Eduard, 278. 
Value, 116 et seq., 234. 
Value, Price and Profit (Marx), 137 

n., 147 n. 
Vandervelde, Emile, 282, 326, 

346. 
Van Kol, Henry H., 308. 
Veblen, Thorstein, quoted, 61. 
Verestchagin, V. V., 204, 
Vice, 247. 
Violence, 113, 216. 
Vital Statistics (Farr) , 32 n. 
Viviani, 279. 
Volders, Jean, 282. 
Volkstribun, 2, 93. 
Von Vollmar, 320, 323. 
Vooruit, 282. 
Voyage en Icarie (Cabet), 197-198. 



W 

Wage Slavery, 9-10. 

Wages, 14, 147-150, 234-235. 

Waldeck-Rousseau, 278. 

Waldenses, the, 241. 

Wallace, Alfred Russell, 63, 360. 

War, 203-205. 

Watt, James, 195. 

Wealth, advantages of, 45-46; con- 
centration of, 164-166. 

Wealth of Nations (Smith), 15 n., 
106 n., 123 n. 

Webb, Sidney, 291. 

Webb, Mrs. Sidney, 291. 

Weitling, Wilhelm, 256, 258, 293. 

Wells, H. G., 199. 

"Whisky Trust," 169, 170, 179. 

Whitney, Eli, 94. 

Wing, Simon, 295. 

Wisconsin, Phalanx, 292; Socialism 
in, 297-298. 

Wolff, Wilhelm, 257, 258. 

Woman Labor, 216, 236, 343. 

Woman Suffrage, 334, 337. 

Woman under Socialism (Bebel), 
241 n., 243. 



382 



INDEX 



Women's Movement, American, 
300; German, 274; Finnish, 306; 
International, 263. 

Working Men's Association, 255. 

Workingmen's Party of the United 
States, 294. 

World as It Is and as It Might Be, 

The (Weitling), 256. 
World economy, 97. 
Wright, Carroll D., 244. 



44 Yellow" unions, 273. 

York, 31. 

Young Europe Association, 256. 

Young Germany Society, 256. 

Young Italy, 256. 

Yucatan, Mayas of, 72. 



Z^tkin, Clara, 274, 321, 323. 



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